Chancellor Jeremy Hunt next month will announce a 12-month extension to a scheme that caps energy costs for businesses, similar to a package for households, although the generosity of the aid will be cut to save money.
Hunt is expected to scale down subsidies to slash the cost of the package by around £20bn. Without the tweaks, the measures could have cost the taxpayer as much as £40bn.Every sector of the UK economy is currently eligible for government support, but Hunt wants to reshape the policy so it targets the most vulnerable businesses, such as pubs, bars and restaurants.
But, channeling money into the sector is tough due to the poor standard of data energy suppliers keep on business customers.International energy markets were rocked in 2022 due to capacity constraints and Russia’s illegal invasion of Ukraine.Contracts for future UK gas supplies peaked in the summer at nearly £900. However, they are now trading below pre-Russia-Ukraine war levels.
Under that scenario, taxpayers could be left with a big bill if the government retains a universal energy bill support package for businesses.