Government support for the cost of business energy is to be reduced. Details are due to be released next week by Chancellor Jeremy Hunt.
According to a report by The Guardian, the chancellor has told business groups including the CBI, the Federation of Small Businesses and the British Chambers of Commerce, that a package providing a lower level than current measures would be available to firms beyond March to ensure support isn’t simply switched off overnight.
Government-backed support for business energy costs has been in place since October. The scheme covers the cost between wholesale prices and a government-supported price of £211 per MW hour for electricity and £75 per MW hour for gas. The plan has always been to cease in March.
In a statement after the meeting, government officials said: “Extending the scheme at current levels could cost tens of billions of pounds, with costs potentially doubling or tripling if international energy prices increase further than expected. It is vital that taxpayer’s exposure to volatile international energy prices is reduced.
“However, the chancellor also heard the concerns of the business community who are facing high energy prices, and explained that any future support, while at a lower level, would be designed to help them transition to the new higher-price environment and avoid a cliff edge in support.”
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