Secretary of State for Energy Security and Net Zero (): The Government provided an
unprecedented package of support for non-domestic users through
the winter in the shape of the Energy Bill Relief Scheme (EBRS),
with a total amount of support of £7.3bn, shielding businesses
and saving some around half of their wholesale energy cost. The
Government has taken difficult but right and considered decisions
when necessary, following an unprecedented rise in energy prices,
to support our essential British businesses and public sector
services.
The Government has been clear that such levels of support were
time-limited and intended as a bridge to allow business to adapt.
The latest data shows wholesale gas prices have fallen to levels
before Putin’s invasion of Ukraine and have significantly
decreased since the EBRS was announced. The Energy Bill Discount
Scheme (EBDS), announced on 9 January and which comes into force
on the 26 April, with support backdated to the start of April,
strikes a balance between supporting businesses between 1 April
2023 and 31 March 2024 and limiting taxpayer’s exposure to
volatile energy markets. The scheme provides long term certainty
for businesses and reflects how the scale of the challenge has
changed since September last year.
The EBDS will provide all eligible businesses and other
non-domestic energy customers with a discount on high gas and
electricity bills until 31 March 2024, following the end of the
EBRS. It will also provide businesses in sectors with
particularly high levels of energy use and trade intensity with a
higher level of support as they are less able to pass these
higher costs on to customers due to international competition.
The price reduction will be linked to the wholesale element of a
non-domestic customer’s gas and electricity bill and Government
will reimburse suppliers in accordance with the scheme.
Further support will be available to domestic end users on heat
networks, who fall under the EBDS due to the heat network
operators having commercial energy contracts, to ensure they do
not face disproportionately higher energy bills than consumers
under the EPG from April 2023.
The EBDS will be established under powers conferred by the Energy
Prices Act 2022 and government intends to pass enabling
legislation. Subject to the will of Parliament, it is intended to
run for 1 year and cover energy consumed from 1 April 2023 until
31 March 2024.
Funding for the EBDS will be sought through the Estimates
process. Any future costs for the delivery of the EBDS can only
be projections and will depend upon energy usage levels and
changes to the wholesale price of energy. As a result, the EBDS
will give rise to a contingent liability.
I have laid before Parliament a Departmental Minute describing
contingent liabilities arising from the Energy Bill Discount
Scheme (EBDS). It is normal practice when a Government Department
proposes to undertake a contingent liability of £300,000 and
above, for which there is no specific statutory authority, for
the Department concerned to present Parliament with a minute
giving particulars of the liability created and explaining the
circumstances. If the liability is called, provision for any
payment will be sought through the normal Supply procedure.
I regret that due to the urgency of this scheme, I have not been
able to follow the usual timelines for issuing notice at least 14
parliamentary sitting days before the liability begins to be
incurred.
The Treasury has approved this proposal. If, during the period of
10 parliamentary sitting days beginning on the date on which this
Minute was laid before parliament, a member signifies an
objection by giving notice of a Parliamentary Question or by
otherwise raising the matter in parliament, final approval to
proceed with incurring the liability will be withheld pending an
examination of the objection.
