Thousands of companies might avoid collapse this winter after the Government announced a new package of energy bill support, but business groups warned it is just a “short-term fix”.

Ministers said the new scheme could roughly halve the price paid for wholesale gas and electricity by non-domestic customers, which include schools and charities.

Read more: Households to receive £400 energy payment - when and how it will be paid to you

The Government will foot part of an organisation’s bill if the wholesale price of gas and electricity stays above a set level.

The support will work differently depending on what kind of energy tariff an organisation is on.

Ministers said the support will approximately match the per-unit price households will pay to cover the wholesale price of their energy from the start of October.

But unlike the two-year household support scheme, businesses will only be helped for six months from the start of October.

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Trade groups welcomed the support, but many worried that it would not be enough or last long enough.

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John McCabe, chief executive of the North East of England Chamber of Commerce said it was ‘vital’ the proposed package meets the size of the challenge He said: “On behalf of our members, we’re pleased to see the detail behind the headlines on support for business.

“This has been Chamber members’ number one concern for the last six months and it is vital that the proposed package meets the size of the challenge.

“However business, charities and public sector energy arrangements are very different to households.

“So we’ll be looking closely at the small print as well as making sure the initial six months of support doesn’t create a cliff edge for our members in the Spring.”

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Darlington MP Peter Gibson said: I am delighted to see support coming forward from Government to meet the challenges that our hard working businesses face over energy costs.

“Just as we stepped up to the plate during covid this Government is now meeting the challenges of the energy cost spike.”

Mary Kelly Foy, Labour’s Durham City MP, said: “For months businesses, schools, hospices and others have been desperate for clarity over whether Liz Truss’ Government would follow Labour’s lead and offer meaningful support this winter.

"It is right that financial support is provided, however it beggars belief that Liz Truss believes working people should solely bear the burden to pay for this, rather than levying a windfall tax on the unearned, eyewatering profits of energy companies.

"Why is it that time and time again when push comes to shove the Conservatives side with oil and gas giants rather than people and businesses struggling to get by in Durham?”

Ministers said companies on a fixed-term contract signed on or before April 1 this year will see the wholesale part of their bill capped automatically.

Around three in four companies are on fixed-term contracts.

The wholesale cost is only part of the bill. It will be capped at £211 per megawatt hour (MWh) for electricity and £75 per MWh for gas.

This is around half the expected wholesale price on the open market, and equivalent to the wholesale cap on household energy bills that will be set in October for two years.

Those who enter new fixed-price contracts after October 1 will get the same support.

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Chancellor Kwasi Kwarteng said: “We have stepped in to stop businesses collapsing, protect jobs and limit inflation.

“And with our plans to boost home-grown energy supply, we will bring security to the sector, growth to the economy and secure a better deal for consumers.”

Shevaun Haviland, director general of the British Chambers of Commerce, said: “Six months support is not enough to make plans for the future.

“We understand there are a range of unknowns for the Government in looking ahead, but without further reassurance very few firms will make plans to invest or grow.

“Some businesses will still struggle to meet their bills despite this Government intervention. The Chancellor must prioritise those firms in his mini-budget on Friday.

The Northern Echo:

Business Secretary Jacob Rees-Mogg has hinted that help with energy bills for schools, hospitals and care homes could continue in a year.

Asked if schools facing similar gas prices as today would still get Government support in 12 months, he told Sky News: “Schools and hospitals and care homes are obviously going to (need to) be able to afford their energy in a year’s time as well as today.

“I can’t announce future schemes, it would be wrong to do so, but we need to make sure that we use this time to find out where the support is needed.”

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