Business leaders have welcomed a new scheme to slash the cost of wholesale gas and electricity for non-domestic customers...but warned it may not be enough to save some firms from closure.

Earlier this month, we told how a number of local traders, such as pubs, fear they will have to pull the plug as a result of spiralling energy bills, which they described as “more damaging than Covid.”

Now the UK Government has announced plans to cap bills for businesses, with a “supported wholesale price” being introduced for six months from October.

This will set the price for non-domestic customers at £211 per megawatt hour (MWh) for electricity and £75 per MWh for gas – around half the projected price on the open market and equivalent to a scheme already 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 consider what support should be made available after March, which ministers have said will focus on “the most vulnerable non-domestic customers and how the government will continue assisting them with energy costs.”

Liz Cameron, Scottish Chambers of Commerce chief executive, welcomed the scheme but raised concerns that energy prices could spike after March and put companies at risk.

She said: “For those firms that will benefit, the six-month cap is not enough for them to be sufficiently reassured that the problem won’t return when the cap is no longer in effect.

“We are concerned that even more sudden rises in energy bills will await firms once the cap is lifted.

“We urge the UK Government to engage immediately with the business community to properly define the ‘vulnerable industries’ cited for support after the original six-month cap.”

Scottish Secretary Alister Jack said the scheme will give “much-needed certainty” to businesses and is being introduced “as a matter of urgency as we move into winter.”

He added: “This comes on top of the Prime Minister’s monumental intervention for domestic customers, saving the average household £1,000 per year on fuel bills, and in addition to the £37billion package of support announced earlier this year.

“The UK Treasury was able to give support to people when we faced Covid and its strength is proving vital again as we continue to tackle the rising cost of living.”