Wholesale energy prices for businesses will be capped at ‘less than half’ of the anticipated winter levels under the government’s support package.

The Energy Bill Relief Scheme offers discounts for all firms for six months from 1 October.

Hospitals, schools and other settings such as community halls and churches will also get help.

Under the scheme, revealed by the Department for Business, Energy and Industry (BEIS), wholesale prices are expected to be fixed for all non-domestic energy customers at £211 per MWh for electricity and £75 per MWh for gas.

Firms do not need to contact suppliers as the discount will automatically be applied to bills.

The scheme applies to fixed contracts agreed on or after 1 April and variable and flexible tariffs and contracts.

Kate Nicholls, CEO of UKHospitality, said:

‘This intervention is unprecedented and it is extremely welcome that government has listened to hospitality businesses facing an uncertain winter. We particularly welcome its inclusiveness – from the smallest companies to the largest – all of which combine to provide a huge number of jobs, which are now much more secure.

‘The government has recognised the vulnerability of hospitality as a sector, and we will continue to work with the government, to ensure that there is no cliff edge when these measures fall away.’

The announcement followed the launch of the Energy Price Guarantee for households. This will also cap the unit price of energy so that the typical UK household will now pay up to an average £2,500 a year on their energy bill for the next two years.

Speaking at the Mini Budget, Chancellor Kwarteng confirmed that the two schemes would cost a combined £60 billion for six months.

The International Monetary Fund (IMF) warned the UK government against ‘large and untargeted fiscal packages’ following the Mini Budget.

The IMF stated that tax measures announced by Chancellor Kwasi Kwarteng in the recent Mini Budget are likely to increase inequality.

On 23 September, the Chancellor used the Mini Budget to announce tax cuts worth over £40 billion. Amongst the measures unveiled was a reduction in the basic rate of income tax; the reversal of the 1.25% rise in national insurance contributions (NICs) that came in this year; and the scrapping of the planned rise in corporation tax to 25%.

The IMF stated that whilst it understands that the measures are intended to boost economic growth, it has concerns that the UK’s fiscal and monetary policies are working at ‘cross purposes’.

Commenting on the IMF’s warning, Lord Frost, Minister of State at the Cabinet Office, said:

‘The IMF has consistently advocated highly conventional economic policies. It is following this approach that has produced years of slow growth and weak productivity.

‘The only way forward for Britain is lower taxes, spending restraint, and significant economic reform.’

Chancellor Kwasi Kwarteng used the 2022 Mini Budget to announce a series of tax cuts for businesses and individuals.

The Chancellor confirmed that the 1.25% rise in national insurance contributions (NICs) that came in this year will be reversed from 6 November, while the Health and Social Care Levy has been cancelled.

The planned rise in corporation tax to 25% will be scrapped and the rate maintained at the current 19%. The basic rate of income tax will be cut to 19p in April 2023, a year ahead of schedule.

Additionally, the level at which homebuyers will start to pay Stamp Duty Land Tax (SDLT) in England and Northern Ireland has been doubled from £125,000 to £250,000. First-time homebuyers will pay no SDLT on homes worth up to £425,000, up from the previous price of £300,000.

For businesses, Investment Zones will be established across the UK that benefit from lower taxes and liberalised planning frameworks to encourage business investment.

The cap on bankers’ bonuses, which limited rewards to twice the salary level, will be axed.

The Chancellor also committed to repealing the off-payroll legislation. The IR35 reforms, which rolled into the public and private sectors in 2017 and 2021 respectively, will no longer apply from April 2023 and responsibility for determining employment status where a personal service company is used will return to the worker.

Mr Kwarteng said:

‘Growth is not as high as it needs to be, which has made it harder to pay for public services, requiring taxes to rise. This cycle of stagnation has led to the tax burden being forecast to reach the highest levels since the late 1940s.

‘We are determined to break that cycle. We need a new approach for a new era focused on growth.’

The government has abandoned its plan to abolish the 45% top rate of income tax due to the negative reaction it has received.

Chancellor Kwasi Kwarteng first announced the policy in the Mini Budget on 23 September.

He has now confirmed that it will not go ahead in a statement on the social media platform Twitter. It has not yet been confirmed whether the same reversal applies to the top rate of income tax on dividends.

In a tweet, Mr Kwarteng said:

‘From supporting British business to lowering the tax burden for the lowest paid, our Growth Plan sets out a new approach to build a more prosperous economy.

‘However, it is clear that the abolition of the 45p tax rate has become a distraction from our overriding mission to tackle the challenges facing our country.

‘As a result, I’m announcing we are not proceeding with the abolition of the 45p tax rate. We get it, and we have listened.

‘This will allow us to focus on delivering the major parts of our growth package.’

Banking trade body UK Finance has revealed that the rapid decline in the use of cash as a form of payment has eased.

A report published by UK Finance found that 40.4 billion payments were made in 2021, which marked a return to pre-pandemic levels. Cash payments accounted for 15% of all payments in the UK.

In 2021 there were 23.1 million consumers who used cash as a form of payment just once a month or not at all. At the same time, there were 1.1 million consumers who mainly used cash when doing their day-to-day shopping.

Debit cards proved to be the most popular form of payment method, making up 48% of all payments.

Adrian Buckle, Head of Research at UK Finance, said:

‘In 2021 we saw the total number of payments return to pre-pandemic levels and a return towards the long-run trends in payment method usage.

‘Contactless continued to be popular, accounting for almost a third of all payments. Cash usage fell slightly, although remained the second most commonly used payment method.’

Internet link: UK Finance website