Tonight, Jeremy Hunt revealed he will reduce corporate energy bill assistance at the end of March.
The Chancellor indicated that the present support program, worth £18 billion over six months, will be reduced to £5.5 billion for the 12 months beginning in April.
Last week, Mr. Hunt cautioned that the existing level of government aid was “unsustainably expensive,” prompting businesses to anticipate a big cut in assistance.
The Energy Bill Relief Scheme, which began in October and will conclude on March 31, according to the Treasury, will be replaced in April by the less generous Energy Bills Discount Scheme.
Businesses, charities, and other non-residential energy consumers will receive a discount of up to £6.97 per megawatt hour (MWh) of gas and £19.61 per MWh of electricity under the new program.
Business groups described the new program as a “huge disappointment” and asserted that the government would be forced to reconsider the “totally insignificant” help being supplied to businesses beginning in April.
The Treasury stated that energy-intensive industries, such as manufacturing, would receive a “substantially higher level of support” than other industries.
Jeremy Hunt has stated that he will reduce business energy bill assistance at the end of March.
Businesses, charities, and other non-domestic energy consumers will receive a discount of up to £6.97 per megawatt hour (MWh) of gas and £19.61 per MWh of electricity under the new program.
The national chair of the Federation of Small Businesses, Martin McTague, presented a scathing critique of the Treasury’s new initiative.
Mr. Hunt has also written to the regulator Ofgem to inquire as to whether additional action is required to alleviate the difficulties firms are experiencing with energy pricing and tariff availability.
The Treasury defended the reduction of support for firms beginning in April by noting that the £18 billion cost of the existing programme is comparable to a 3 cent rise in income tax.
It also cited recent data indicating that wholesale gas prices have dropped to levels shortly before Russia’s invasion of Ukraine and have decreased by nearly half since the present arrangement was introduced.
Mr. Hunt stated, “My top priority is addressing the rising cost of living, which is a challenge for both families and businesses.”
This necessitates making difficult decisions to reduce inflation while providing as much assistance to individuals and businesses as possible.
“Wholesale energy costs are decreasing and have now returned to levels just prior to Putin’s invasion of Ukraine.
We’re launching the new Energy Bills Discount Scheme to provide businesses with the clarity they need to plan ahead in the face of the possibility of a price increase.
The national chair of the Federation of Small Businesses, Martin McTague, provided a scathing assessment of the Treasury’s new initiative.
“Today’s decision to virtually eliminate assistance through the Energy Bill Relief Scheme is a major setback for small businesses,” he said.
“For people in need, the revised version of the program’s discount is insignificant. Numerous small businesses will be unable to survive on the pennies offered under the new iteration of the program.
This is so irrelevant. Two pence off a kilowatt-hour of power and half a pence off a gallon of gas are inconsequential for small enterprises, yet costing taxpayers billions. The government will be compelled to return.
The Liberal Democrats’ business spokesman, Sarah Olney, stated that the government could not restrict funding at a worse moment.
She stated, “Many businesses will face another cliff in a few months – they need real, meaningful, and lasting support now.”
Mr. Hunt had already said in last year’s Autumn Statement that government assistance for gas and electricity bills for households will be decreased beginning in April.
»Jeremy Hunt cuts business energy bill support from £18bn to £5.5bn«