U.K. ministers are close to finalizing plans for a two-pronged package of support for businesses to help with high energy costs all the way through winter 2024, the Financial Times reports.
Chancellor of the Exchequer Jeremy Hunt is the architect of a package that would give low-level universal support to all companies with their energy costs for the next 15 months, the paper said. Extra support can be expected for energy-intensive businesses.
Already, the government agreed to subsidize an energy price cap for six months under the Energy Bill Relief Scheme, but companies, other than a few of the most “vulnerable” industries, had been facing a cliff edge when the program ends in late March.
Hunt’s announcement, which is expected before Christmas, according to the FT, would mark a major shift in the government’s approach to helping businesses with their energy bills.
Under current plans still being finalized, all companies would see the per-unit price of energy
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capped until April 2024, in line with an existing pledge to households, the report said.
Costs have soared and shortage fears grown since Russia’s invasion of Ukraine sent gas
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prices surging and as a period of higher inflation, rising interest rates and a spotty post-COVID 19 recovery increases odds of economic recession by some measures. That means the government is also eyeing broader pressures.
The chancellor has conceded that in order to make the universal support affordable to the government there will have to be a higher price cap than under the existing support package, the FT said. Energy suppliers will be able to charge a higher maximum price for corporate customers than at present.
In addition to the base plan, there is expected to be a second targeted support package for businesses in vulnerable sectors, such as hospitality, as well as high-energy users such as steel manufacturing.
