The UK is set to reduce the level of support it gives to businesses to help with their soaring energy bills by 85% from April, the Telegraph newspaper said.
(Bloomberg) — The UK is set to reduce the level of support it gives to businesses to help with their soaring energy bills by 85% from April, the Telegraph newspaper said.
British firms currently benefit from a six-month program of energy aid ending in March worth £18 billion ($21.5 billion), which is due to be replaced by a 12-month package worth £5 billion, the Telegraph reported, citing anonymous government sources. The new figure is “largely agreed,” the newspaper said.
The Treasury declined to comment on the Telegraph report. A person familiar with the matter said there would be a substantial reduction in the energy aid offered to businesses, without giving a specific figure.
Read More: UK Treasury Signals Plans to Cut Energy Support for Businesses
Chancellor of the Exchequer Jeremy Hunt has been paring back Britain’s energy support packages as he tries to stabilize the nation’s public finances, which suffered a shock under the short-lived premiership of Liz Truss. He is due to make an official announcement on business support when Parliament returns from its Christmas recess next week.
Under the current offering, companies get a saving of as much as £345 for a megawatt-hour of electricity and £91 for a megawatt-hour of gas. The initiative was introduced to shield firms from soaring price hikes exacerbated by Russia’s war in Ukraine.
Last week, the Treasury said in a statement that the business support program “is very expensive, and we need to ensure longer-term affordability and value for money” for the British taxpayer. “That is why we are currently carrying out a review with the aim of reducing the public finances’ exposure to volatile international energy prices from April.”
Hunt has also been weighing whether to maintain energy aid to all firms, or just those in particularly energy-intensive sectors. The Financial Times reported he is due to continue the universality of the program but with extra help offered to vulnerable industries.
More stories like this are available on bloomberg.com
©2023 Bloomberg L.P.