The UK government has unveiled a new plan to help businesses struggling with soaring energy costs — but the support is far less than what had been on offer before.
Exchequer Secretary to the Treasury James Cartlidge told the UK Parliament that the government will commit up to £5.5 billion to the new support programme, which will run from the start of April this year to the end of March 2024.
“It is not sustainable for the Exchequer to continue to support large numbers of businesses at the current level, " Mr Cartlidge told MPs.
“No responsible, serious government anywhere in the world can permanently shield businesses from this energy price shock.”
Eligible UK businesses will receive a per-unit discount to their energy bills, which will have a maximum and will only be applied if wholesale prices are above a certain threshold.
For electricity, the discount will be £19.61 per megawatt hour (MWh), with a price threshold of £302 per MWh. For gas, it will be £6.97 per MWh with a price threshold of £107 per MWh.
The discounts and thresholds are higher and lower, respectively, for those companies deemed to be intense energy users.
For high-energy users, the electricity discount will be £89 per MWh, with a price threshold of £185 per MWh, while for gas, the discount will be £40 per MWh with a price threshold of £99 per MWh.
Mr Cartlidge said a typical small retail store that uses 2 MWh of gas and 1 MWh of electricity each month could receive up to £403 of taxpayer-funded support in the 2023/2024 financial year.
A long time coming
The government had hinted that the money available beyond April this year to support businesses with their energy bills would be considerably less than was available for the six months from last October.
By the time the current Energy Bill Relief Scheme has run its course at the end of March, it is estimated that the government will have spent in the region of £18 billion.
“It’s unrealistic to think the scheme could stay affordable in its current form, but some firms will undoubtedly still find the going hard,” said Tom Thackray, director for decarbonisation policy at the Confederation of British Industry.
“The government has done much to protect businesses through the energy crisis. It must remain open, flexible and pragmatic in its approach to volatile wholesale energy markets as the year unfolds.”
Gareth Stace, director general of UK Steel, said: “There will be concerns that the newly announced support falls short of that of competitor countries, including Germany.
“The government is betting on a calm and stable 2023 energy market, in a climate of unstable global markets, with the scheme no longer protecting against extremely volatile prices.”
Price falls
Currently, the government has a Supported Wholesale Price of £211 per MWh for electricity and £75 per MWh for gas.
Much of the calculations behind setting support at these levels was based on predictions made back in August and September last year.
Wholesale gas prices in Europe spiked in March following Russia's invasion of Ukraine and even more so in August, when worries emerged about the amount of gas that had been stored and the predicted demand for the coming winter.
At one point in August, the price of gas in Europe soared to about €340 euros per MWh.
But in recent weeks, the relatively mild weather has led to loosening of demand and gas prices have fallen. By last week, they were back down to levels not seen since the Russian invasion of Ukraine.
In addition to the mild weather, European nations have been successful in filling their storage facilities with liquefied natural gas (LNG), imported from regions around the world including the Gulf. This has eased concerned about gas supplies this and next winter.
However, none of this helps businesses or households in the near term. Energy companies buy most of their gas and electricity as futures contracts, which allows them to fix their costs.
Some of the futures contracts for natural gas on the Dutch TTF market for delivery later in the year are more expensive than the current wholesale price.
“Forward prices continue to see the market at similar levels to the current TTF benchmark, all the way to at least March 2025,” Tom Marzec-Manser, head of gas analytics at ICIS, told The National.
“So we are not out of the woods, even with prices recently falling and the fundamentals for the remainder of this winter improving.”
Glen Kurokawa, power sector lead in economics at the global business intelligence company CRU, told The National: “Europe will need to build up gas inventories for next winter first, and there are some potential headwinds here.
“Europe will likely receive less piped Russian gas imports in 2023, and there will likely be more competition for LNG from China as its economy picks up after pandemic-related restrictions.”
Other analysts point to the predicted profits of the big oil companies in the next few years as a reason to be optimistic about energy prices.
“For the moment, analysts seem inclined to believe that oil [and gas] prices are going to fall in 2023 and 2024, because they are forecasting a one-third fall in operating profit from the West’s seven oil majors between 2022 and 2024,” said Russ Mould, investment director at AJ Bell.
Nonetheless, energy prices remain high by historical standards. Even given the recent falls, they are still four to five times higher than they were two years ago.
Future risk
Chancellor of the Exchequer Jeremy Hunt said: “Wholesale energy prices are falling and have now gone back to levels just before [Russian President Vladimir] 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 [Office of Gas and Electricity Markets] asking for an update on whether further action is needed to make sure the market is working for businesses.”
Consumer advice groups, price comparison websites and switching companies are urging businesses to check their current contracts and be absolutely sure they understand the terms of any new contract they might be about to enter into with their current or a new energy provider.
“Any business looking for a new deal must ensure they understand the terms of their contract before signing,” said Jack Arthur, business energy expert at Uswitch for Business.
“They should also be reminded to check their contract end date as failing to secure a new agreement can add eye-watering costs to a business's energy bill.”
Global state-owned investor ranking by size
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United States
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China
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UAE
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Japan
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Norway
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Canada
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Singapore
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Australia
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Saudi Arabia
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South Korea
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ABU DHABI ORDER OF PLAY
Starting at 10am:
Daria Kasatkina v Qiang Wang
Veronika Kudermetova v Annet Kontaveit (10)
Maria Sakkari (9) v Anastasia Potapova
Anastasia Pavlyuchenkova v Ons Jabeur (15)
Donna Vekic (16) v Bernarda Pera
Ekaterina Alexandrova v Zarina Diyas
Results
7pm: Wathba Stallions Cup – Handicap (PA) Dh70,000 (Dirt) 1,600m; Winner: RB Kings Bay, Abdul Aziz Al Balushi (jockey), Helal Al Alawi (trainer)
7.30pm: Maiden (PA) Dh 70,000 (D) 1,600m; Winner: AF Ensito, Fernando Jara, Mohamed Daggash
8pm: Maiden (PA) Dh70,000 (D) 1,400m; Winner: AF Sourouh, Tadhg O’Shea, Ernst Oertel
8.30pm: Maiden (PA) Dh70,000 (D) 1,800m; Winner: Baaher, Fabrice Veron, Eric Lemartinel
9pm: Maiden (PA) Dh70,000 (D) 2,000m; Winner: Mootahady, Antonio Fresu, Eric Lemartinel
9.30pm: Handicap (TB) Dh70,000 (D) 2,000m; Winner: Dubai Canal, Tadhg O’Shea, Satish Seemar
10pm: Al Ain Cup – Prestige (PA) Dh100,000 (D) 2,000m; Winner: Harrab, Bernardo Pinheiro, Majed Al Jahouri
Generational responses to the pandemic
Devesh Mamtani from Century Financial believes the cash-hoarding tendency of each generation is influenced by what stage of the employment cycle they are in. He offers the following insights:
Baby boomers (those born before 1964): Owing to market uncertainty and the need to survive amid competition, many in this generation are looking for options to hoard more cash and increase their overall savings/investments towards risk-free assets.
Generation X (born between 1965 and 1980): Gen X is currently in its prime working years. With their personal and family finances taking a hit, Generation X is looking at multiple options, including taking out short-term loan facilities with competitive interest rates instead of dipping into their savings account.
Millennials (born between 1981 and 1996): This market situation is giving them a valuable lesson about investing early. Many millennials who had previously not saved or invested are looking to start doing so now.
Sole survivors
- Cecelia Crocker was on board Northwest Airlines Flight 255 in 1987 when it crashed in Detroit, killing 154 people, including her parents and brother. The plane had hit a light pole on take off
- George Lamson Jr, from Minnesota, was on a Galaxy Airlines flight that crashed in Reno in 1985, killing 68 people. His entire seat was launched out of the plane
- Bahia Bakari, then 12, survived when a Yemenia Airways flight crashed near the Comoros in 2009, killing 152. She was found clinging to wreckage after floating in the ocean for 13 hours.
- Jim Polehinke was the co-pilot and sole survivor of a 2006 Comair flight that crashed in Lexington, Kentucky, killing 49.
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TV: BeIN Sports
Dubai Rugby Sevens, December 5 -7
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B – United States, Australia, Scotland, Ireland
C – New Zealand, Samoa, Canada, Wales
D – South Africa, England, Spain, Kenya
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Name: Thndr
Started: 2019
Co-founders: Ahmad Hammouda and Seif Amr
Sector: FinTech
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Current number of staff: More than 150
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A new relationship with the old country
Treaty of Friendship between the United Kingdom of Great Britain and Northern Ireland and the United Arab Emirates
The United kingdom of Great Britain and Northern Ireland and the United Arab Emirates; Considering that the United Arab Emirates has assumed full responsibility as a sovereign and independent State; Determined that the long-standing and traditional relations of close friendship and cooperation between their peoples shall continue; Desiring to give expression to this intention in the form of a Treaty Friendship; Have agreed as follows:
ARTICLE 1 The relations between the United Kingdom of Great Britain and Northern Ireland and the United Arab Emirates shall be governed by a spirit of close friendship. In recognition of this, the Contracting Parties, conscious of their common interest in the peace and stability of the region, shall: (a) consult together on matters of mutual concern in time of need; (b) settle all their disputes by peaceful means in conformity with the provisions of the Charter of the United Nations.
ARTICLE 2 The Contracting Parties shall encourage education, scientific and cultural cooperation between the two States in accordance with arrangements to be agreed. Such arrangements shall cover among other things: (a) the promotion of mutual understanding of their respective cultures, civilisations and languages, the promotion of contacts among professional bodies, universities and cultural institutions; (c) the encouragement of technical, scientific and cultural exchanges.
ARTICLE 3 The Contracting Parties shall maintain the close relationship already existing between them in the field of trade and commerce. Representatives of the Contracting Parties shall meet from time to time to consider means by which such relations can be further developed and strengthened, including the possibility of concluding treaties or agreements on matters of mutual concern.
ARTICLE 4 This Treaty shall enter into force on today’s date and shall remain in force for a period of ten years. Unless twelve months before the expiry of the said period of ten years either Contracting Party shall have given notice to the other of its intention to terminate the Treaty, this Treaty shall remain in force thereafter until the expiry of twelve months from the date on which notice of such intention is given.
IN WITNESS WHEREOF the undersigned have signed this Treaty.
DONE in duplicate at Dubai the second day of December 1971AD, corresponding to the fifteenth day of Shawwal 1391H, in the English and Arabic languages, both texts being equally authoritative.
Signed
Geoffrey Arthur Sheikh Zayed
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- Grade 9 = above an A*
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- Grade 3 = between grades D and E
- Grade 2 = between grades E and F
- Grade 1 = between grades F and G
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UAE squad
Aryan Lakra (captain), Vriitya Aravind, Deshan Chethyia, Mohammed Farazuddin, Jonathan Figy, Osama Hassan, Karthik Meiyappan, Rishabh Mukherjee, Ali Naseer, Wasi Shah, Alishan Sharafu, Sanchit Sharma, Kai Smith, Akasha Tahir, Ansh Tandon
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Israel Palestine on Swedish TV 1958-1989
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