Tag: support package

UK government unveils new “Energy Bills Discount Scheme” for businesses, charities, and the public sector

  • Scheme will provide a discount on high energy costs to give businesses certainty while limiting taxpayers’ exposure to volatile energy markets
  • Businesses in sectors with particularly high levels of energy use and trade intensity will receive a higher level of support.

A new energy scheme for businesses, charities, and the public sector was confirmed yesterday (9th January), ahead of the current scheme ending in March. The new scheme will mean all eligible UK businesses and other non-domestic energy users will receive a discount on high energy bills until 31 March 2024.

This will help businesses locked into contracts signed before recent substantial falls in the wholesale price manage their costs and provide others with reassurance against the risk of prices rising again.

The government provided an unprecedented package of support for non-domestic users through this winter, worth £18 billion per the figures certified by the OBR at the Autumn Statement. This is equivalent to the cost of an increase of around three pence on people’s income tax.

The government has been clear that such levels of this support, unprecedented in its nature and huge scale, were time-limited and intended as a bridge to allow businesses to adapt. The latest data shows wholesale gas prices have now fallen to levels just before Putin’s invasion of Ukraine and have almost halved since the current scheme was announced.

The new scheme therefore strikes a balance between supporting businesses over the next 12 months and limiting taxpayer’s exposure to volatile energy markets, with a cap set at £5.5 billion. This provides long term certainty for businesses and reflects how the scale of the challenge has changed since September last year.

The Chancellor of the Exchequer, Jeremy Hunt, said: “My top priority is tackling the rising cost of living – something that both families and businesses are struggling with. That means taking difficult decisions to bring down inflation while giving as much support to families and business as we are able.

“Wholesale energy prices are falling and have now gone back to levels just before Putin’s invasion of Ukraine. But to provide reassurance against the risk of prices rising again we are launching the new Energy Bills Discount Scheme, giving businesses the certainty they need to plan ahead.

“Even though prices are falling, I am concerned this is not being passed on to businesses, so I’ve written to Ofgem asking for an update on whether further action is action is needed to make sure the market is working for businesses.”

From 1 April 2023 to 31 March 2024, eligible non-domestic customers who have a contract with a licensed energy supplier will see a unit discount of up to £6.97/MWh automatically applied to their gas bill and a unit discount of up to £19.61/MWh applied to their electricity bill, except for those benefitting from lower energy prices.

A substantially higher level of support will be provided to businesses in sectors identified as being the most energy and trade intensive – predominately manufacturing industries.

A long standing category associated with higher energy usage; these firms are often less able to pass through cost to their customers due to international competition. Businesses in scope will receive a gas and electricity bill discount based on a supported price which will be capped by a maximum unit discount of £40.0/MWh for gas and £89.1/MWh for electricity.

Energy Bill Discount Scheme summary

For eligible non-domestic customers who have a contract with a licensed energy supplier, the government is announcing the following support:

  • From 1 April 2023 to 31 March 2024, all eligible non-domestic customers who have a contract with a licensed energy supplier will see a unit discount of up to £6.97/MWh automatically applied to their gas bill and a unit discount of up to £19.61/MWh applied to their electricity bill.
  • This will be subject to a wholesale price threshold, set with reference to the support provided for domestic consumers, of £107/MWh for gas and £302/MWh for electricity. This means that businesses experiencing energy costs below this level will not receive support.
  • Customers do not need to apply for their discount. As with the current scheme, suppliers will automatically apply reductions to the bills of all eligible non-domestic customers.

For eligible Energy and Trade Intensive Industries, the government is announcing:

  • These businesses will receive a discount reflecting the difference between a price threshold and the relevant wholesale price.
  • The price threshold for the scheme will be £99/MWh for gas and £185/MWh for electricity.
  • This discount will only apply to 70% of energy volumes and will be subject to a ‘maximum discount’ of £40.0/MWh for gas and £89.1/MWh for electricity.

The Chancellor has also written to OFGEM, asking for an update in time for the Budget on the progress of their review into the non-domestic market. He has asked for their assessment of whether further action is action is needed to secure a well-functioning market for non-domestic customers following reports of challenges certain customers are facing, including in relation to the pricing and availability of tariffs, standing charges and renewal terms, and the ability of certain sectors to secure contracts.

Businesses in England will also benefit from support with their business rates bills worth £13.6 billion over the next five years, a UK-wide £2.4 billion fuel duty cut, a six month extension to the alcohol duty freeze and businesses with profits below £250,000 will be protected from the full corporation rate rise, with those making less than £50,000 – the vast majority of UK companies – not facing any corporation tax increase at all.

Cost of Living Crisis: £324 payment to hit bank accounts from today

Almost one in four families across the UK will receive £324 from the government this month as the latest Cost of Living Payments are sent out from today (8 November 2022).

Over 8 million households in England, Wales, Scotland and Northern Ireland who claimed qualifying means-tested benefits during the eligibility period will be automatically paid £324 this month, as part of £1,200 worth of direct help for households.

  • over 8 million benefit claimants to receive £324 this month as part of Cost of Living support
  • DWP claimants will receive their second Cost of Living payment by 23 November 2022, and eligible tax credit claimants, on no other means-tested benefits, will receive it between 23 and 30 November 2022
  • payments will automatically be made to everyone eligible, with no need for anyone to apply

The payments, starting today from the Department for Work and Pensions, are made directly into eligible recipients’ bank accounts, with no need for people to apply or do anything to receive it.

The payment reference on DWP recipients’ bank accounts will be their national insurance number, followed by “DWP COL”. For HMRC recipients the payment reference will be “HMRC COLS”.

Work and Pensions Secretary, Mel Stride said: “We understand that people are struggling and that is why we’ve consistently acted to ensure millions of low-income families are supported. We will continue to act with compassion as we navigate challenging global economic circumstances.

“As part of a wider £37 billion package of support, this latest £324 payment will help the most vulnerable people in our society who are worrying about their finances through the winter months.”

The UK government’s £1,200 support package contains £400 for energy bills that is being paid in monthly instalments to all domestic energy customers between now and March 2023. It also includes a £150 Council Tax rebate for 85% of all UK households and the previous £326 Cost of Living Payment made by DWP in July and by HMRC in September.

On top of this, nearly one in ten people received the £150 disability payment in September, and a £300 addition to Winter Fuel Payments will go to over eight million pensioner households over the winter.

Chancellor of the Exchequer, Jeremy Hunt added: “Prices are rising across the world as we manage the aftershock of COVID-19 and Putin’s invasion of Ukraine. We recognise that families back home are struggling, which is why we’ve taken decisive action to hold down energy bills this winter, and provided hundreds of pounds of cash support for each vulnerable household.

“As part of that support, over 8 million vulnerable households – almost a quarter of families in the UK – will automatically receive a second cost of living payment worth £324 in their bank account from today.

“And while we can’t completely protect people from rising prices, my priority at the upcoming Autumn Statement will be to protect the poorest in society as we take the tough decisions necessary to fix our public finances.”

Those eligible to receive the second cost of living payment from today include people on:

  • Universal Credit
  • Income-based Jobseekers Allowance (JSA)
  • Income-related Employment and Support Allowance (ESA)
  • Income Support
  • Pension Credit

To be eligible, claimants must have been claiming and entitled to a payment between 26 August and 25 September 2022, with the exception of pensioner households, who may be able to have a new Pension Credit claim backdated.

They have until 18 December 2022 to submit a valid claim for Pension Credit, which could entitle them to the £324 Cost of Living payment. Anyone can check their eligibility for Pension Credit using the online calculator or by calling the freephone claim line, on: 0800 99 1234.

Even if you are not on a qualifying DWP benefit you may still be eligible for the £324 payment, as HMRC are also making payments to over a million people who receive Working Tax Credit or Child Tax Credit and no other eligible benefits. These will be paid between 23 and 30 November 2022 and customers do not need to contact the government or apply for the payment at any stage

The £324 payment and the overall £1,200 package come on top of wide-ranging government support with the cost of living this winter, including an extension to the Household Support Fund, which is providing an extra £421 million between October and March to help vulnerable people with the essentials.

As well as this, the Energy Price Guarantee is ensuring people across the country pay significantly less for their energy bills, with a typical household saving around £700 this winter.

One in four families will receive first Cost of Living Payment from today

Almost one in four families across the UK will get £326 sent directly to them from today, with the second instalment of £324 sent later this year as part of the UK Government’s £37 billion support package.

  • £326 – the first of two cost of living payments – will automatically hit seven million bank accounts between today and 31 July 2022 as part of the government’s £37 billion support package
  • Second instalment of £324 will follow from the autumn, with separate payments for pensioners and disabled people also coming later this year
  • Tax credit claimants will receive their first cost of living instalment by autumn

Over eight million households on means-tested benefits will automatically get the first instalment of £326 from this month.

This means that, combined with other support, millions of low-income households across the UK will receive at least £1,200 from the government by Christmas to ease Cost of Living pressures.

On top of that, nearly one in ten people will get the £150 disability payment this Autumn, and over 8 million pensioner households could get an extra £300 from Winter Fuel Payments in November and December.

Prime Minister Boris Johnson said: “Just as we looked after people during lockdown, we will help them get through these tough economic times.

“Today’s payment is the signal to millions of families that we are on their side and we have already promised more cash in the autumn, alongside other measures – including our Help for Households – to support the vulnerable and ease the burden.”

Work and Pensions Secretary, Thérèse Coffey said: “Our help for households will begin landing in bank accounts today as we make sure those on the lowest incomes get the support they need in the face of rising costs.

“This first instalment of £326 should reach all eligible low-income households by the end of July.”

Chancellor of the Exchequer, Nadhim Zahawi said: “It’s great that millions of the families who are most in need are starting to receive their Cost of Living Payments, which I know will be a massive help for people who are struggling.

“Alongside tax cuts, changes to Universal Credit and the Household Support Fund, these payments are a vital part of our £37 billion support package to help people deal with rising prices.”

Most people entitled to the first instalment of the Cost of Living payment will receive it between now and 31 July 2022. Households who are eligible because they receive tax credits and no other eligible benefits will receive their first instalment from HMRC in the autumn, and the second instalment in the winter.

DWP will administer payments for customers on all other eligible means-tested benefits, and customers do not need to contact the government or apply for the payment at any stage.

In addition to the £650 Cost of Living Payment, all domestic energy customers in the UK will receive a £400 grant to help with energy bills, and those in Council Tax bands A-D in England will get an extra £150, which has already been sent to many households. This brings support for millions to £1,200 by the end of the year.

The disability and pensioner payments come in addition to this, as does any support from the Household Support Fund, which was recently extended through to March 2023 with £421 million additional funding.

It is now worth £1.263 billion, and combined with £237 million for devolved nations, means this support package now stands at £1.5 billion. The Household Support Fund is designed to help low-income households in England with food and energy bills, and is distributed by local authorities, who know their areas best.

Total UK Government support this year for low-income families stands at £37 billion, a figure which includes a recent rise to £12,570 for the National Insurance starting thresholds. This will benefit 30 million working people and is worth £330 to a typical employee.

£21 million for culture and events

Additional funds for organisations and freelancers

A £21 million support package to support cultural and events organisations and freelancers experiencing cancellations due to the rapid spread of the new Omicron variant has been announced.

This is to help manage the significant impact of the new guidelines around social distancing and the limitations on the number of people who can attend events.

The £21 million is from the £100 million package announced by the Scottish Government last week to compensate businesses affected by events cancellations and includes an additional £1 million from existing events sector funds.

The funds will be allocated as follows:

  • £10.2 million for cultural organisations and venues to be administered by Creative Scotland
  • £2.8 million towards the wider events supply chain to be administered by EventScotland.
  • £8 million for the Cancellation Fund for Creative Freelancers to be administered by Creative Scotland.

Creative freelancers can apply for between £500 and £2,000 from the cancellation fund which opens at 2pm on Thursday, 6 January 2022.

Details on who is eligible for the fund and how to apply will be available on Creative Scotland’s website this afternoon.

More information and guidelines on the other funds administered by Creative Scotland and EventScotland will be published in early January.

Culture Secretary Angus Robertson said: “Culture and events continue to be among the sectors hardest hit by COVID-19 as the emergence of a new variant is once again causing disruption and uncertainty.

“The steps we’re asking the public to take to minimise the spread of the virus are having a severe financial impact on the sector at a time when they were just beginning to recover from previous waves of the coronavirus.

“In the past few weeks, both myself and Culture Minister Jenny Gilruth have been speaking to freelancers and representatives from culture and events organisations to ensure they get immediate support to meet their needs.

“This £21 million in additional funding is vital to support culture and events organisations and protect the livelihoods of the people who work in the sector.”

Iain Munro, CEO, Creative Scotland said: “This additional emergency funding for Scotland’s culture sector is very welcome.   

“This afternoon, we’ll publish guidance about the first tranche for creative freelancers who’re experiencing immediate financial hardship due to the loss of income because of cancellations and deferrals caused by the pandemic. 

“Applications will open on Thursday 6 January, and will be followed by further details of how and when to apply for the emergency support for organisations. 

“The Covid-19 rollercoaster seems never ending but we will work hard with the sector to pull together again and overcome the challenges that this new wave of the pandemic presents to ensure we are able to gather in cultural spaces to enjoy Scotland’s rich, diverse and world-renowned art and creativity, and to celebrate all that they bring to our lives, in so many different ways.”

Paul Bush OBE, VisitScotland Director of Events said: “The additional £2.8m in emergency funding for Scotland’s events sector is welcome news as it deals with the latest challenges presented by the Omicron variant.

“EventScotland will work with the Scottish Government and the Event Industry Advisory Group (EIAG) to determine the best way of distributing the funding to ensure we get support to those in need, and will share further details on this in the new year. We will also work with them to look at future funding programmes to ensure the industry can return and rebuild when the time is right.”