£25 BILLION ENERGY LIFELINE FOR PUBS, SCHOOLS, HOSPITALS

BILLS 'HALVED' BUT HELP WILL ONLY LAST 6 MONTHS

- David Bond and Jonathan Prynn

MINISTERS today announced an "unprecedented" lifeline for businesses and the public sector which they said would reduce bills to "less than half" than feared this winter.

With thousands of firms, hospitals, schools and pub chains facing critical choices as gas and electricity prices spiral in the next few months, Prime Minister Liz Truss said the bailout would provide them with much needed "certainty and peace of mind".

"I understand the huge pressure businesses, charities and public sector organisations are facing with their energy bills, which is why we are taking immediate action to support them over the winter and protect jobs and livelihoods," said Ms Truss, who is in New York for the United Nations General Assembly.

The Prime Minister has already announced an emergency plan to freeze energy bills for households. Taken together the two bailouts could cost the Government £150 billion, placing squeezed public finances under even greater strain. Market experts Cornwall Insight estimated the cost of the business support package could be £25 billion. Businesses were not protected by the “Energy Price Guarantee”, which caps average domestic gas and electricity bills at £2,500 a year. Now, under the Government’s new “Energy Bill Relief Scheme”, all UK businesses and public sector organisations, will benefit from the same discount on wholesale prices for the next six months which, officials said, would be “less than half” the anticipated prices this winter. Chancellor Kwasi Kwarteng is expected to set out further details of the cost of the energy freezes in a minibudget on Friday when he is also expected to announce plans to slash taxes in a radical shift in economic policy aimed at driving growth.