The government is to provide wholesale gas and electricity price discounts for all non-domestic customers for the next six months. What does this mean for the personal care sector?

As part of the Energy Bill Relief Scheme, the government has set a Supported Wholesale Price for non-domestic services which sits at half the wholesale prices anticipated this winter. This is anticipated to sit at around £211 per MWh for electricity and £75 per MWh for gas. This is equivalent to the wholesale element of the Energy Price Guarantee for households. 

The plan is set to run for six months, offering a short-term reprieve from the rising cost of bills for the personal sector. Energy bills acount for 80% of hair and beauty businesses’ overheads, which goes some way to highlight the reliance that personal care service spaces have on gas and electricity. 

How do the gas and electricity discounts work?

• Non-domestic customers on existing fixed-price contracts will be eligible for support as long as the contract was agreed on or after 1 April 2022. Provided that the wholesale element of the price the customer is paying is above the Government Supported Price, per unit energy costs will automatically be reduced by the relevant p/kWh for the duration of the Scheme. Customers entering new fixed price contracts after 1 October will receive support on the same basis.

• Are you on a deemed or variable tariff? will receive a per-unit discount on energy costs, up to a maximum of the difference between the Supported Price and the average expected wholesale price throughout the Scheme. Non-domestic customers on default or variable tariffs will therefore pay reduced bills, but these will still change over time and may still be subject to price increases.

• For businesses on flexible purchase contracts, typically some of the largest energy-using businesses, the level of reduction offered will be calculated by suppliers according to the specifics of that company’s contract and will also be subject to the Maximum Discount. 

The British Beauty Council is calling for the government to extend the cuts beyond the six months to ensure long-term relief.

On the new plan, Victoria Brownlie, Chief Policy Officer, says: ‘The personal care sector is a high-usage industry, regardless of season, with spas having to maintain operational temperatures, salons relying on hairdryers and hot water to operate and air conditioning units used as standard throughout the year. Our industry must retain this support post the announced six-month period, otherwise, a sector that was showing its resilience and growth will be at real risk of decline.’

Your feedback is critical in helping us make the case for hair and beauty as a ‘vulnerable’ sector to ensure extended support. That’s why we are working with the NHBF on a short questionnaire about evergy prices. 

The survey should take less than 10 min and your responses are strictly confidential.