Energy bill support for firms set to be cut

As reported by the BBC, a new scheme to support firms with their energy bills will be announced in the House of Commons

The current scheme which caps the unit cost of gas and electricity for all businesses expires at the end of March. It will be replaced with a new scheme that offers a discount on wholesale prices rather than a fixed price.

The business group, the CBI, has been calling for sectors including car manufacturing and chilled food processing to be included in the definition.

Last week, Chancellor Jeremy Hunt told industry leaders that the current scheme to support businesses was “unsustainably expensive”.

Firms have been warning of a ‘cliff-edge’ when the current support stops at the end of March, and the new scheme is expected to run until March 2024 to avoid this.

But the total level of government support is expected to fall sharply – by more than half – from the £18.4bn the current six-month scheme is estimated to have cost by the time it ends.

This is partly due to wholesale energy prices falling very sharply in recent months.

 The bottom line is that energy prices are going up this year for businesses at the same time as their customers’ incomes are being squeezed even further.