John Swinney has warned the UK Government support scheme for businesses struggling to pay energy bills could be inadequate.
The Deputy First Minister was responding to plans announced today to slash the cost of wholesale gas and electricity for non-domestic customers for six months from October.
The UK Government cap will mean the “supported wholesale price” will be £211 per megawatt hour (MWh) for electricity and £75 per MWh for gas – about half the projected price on the open market and equivalent to the scheme in place for households.
Businesses who agreed fixed-term contracts on or after April 1 of this year will see the wholesale part of their bill capped automatically.
A review will take place in three months that will look at support to be made available after March, which the Government said will focus on “the most vulnerable non-domestic customers and how the Government will continue assisting them with energy costs”.
Swinney said: “Energy policy is reserved to the UK Government and we have been calling for it to introduce a business energy cap for some time.
“I welcome that it has now done so, but without substantial reform to the energy market there is a real risk that this temporary measure will prove to be inadequate.
“Given the increased cost of borrowing this support must be funded, in part, by targeting windfall gains in the energy sector.”
He called for changes to the current approach on electricity transmission charging, adding: “The UK Government also needs to match the more generous levels of support provided by EU countries such as Germany.
“The powers and resources needed to tackle the cost of living emergency on the scale required: access to borrowing, welfare, VAT on fuel, taxation of windfall profits, regulation of the energy market; lie with the UK Government and we have continually urged it to use all the powers at its disposal."
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