December 22, 2022
The Financial Times says that U.K. ministers are close to completing preparations for a two-pronged package of support for firms to help with high energy bills all the way through winter 2024.
The plan, according to the newspaper, was drafted by Chancellor of the Exchequer Jeremy Hunt and would provide all businesses with low-level universal support for their energy bills for the ensuing 15 months. Businesses that use a lot of electricity should anticipate additional support.
Under the Energy Bill Relief Scheme, the government had already agreed to subsidize an energy price cap for six months, but businesses, with the exception of a handful of the most “vulnerable” industries, had been facing a precipice when the program ends in late March.
According to the Financial Times, Hunt’s announcement, which is anticipated before Christmas, would signal a significant change in the government’s strategy for assisting companies with their energy costs.
According to the newspaper, current proposals, which are still being completed, would cap the cost of energy per unit for all firms at BRN00, 0.53% until April 2024, in keeping with a commitment already made to homes.
Since Russia’s invasion of Ukraine, gas prices have skyrocketed and shortage fears have increased. By some measures, this era of greater inflation, rising interest rates, and a shaky post-COVID 19 recovery raises the likelihood of an economic recession. This indicates that the government is also considering larger pressures.
According to the Financial Times, the chancellor has acknowledged that a higher price cap than that of the current support package will be necessary to make the universal support affordable for the government. Energy providers will be permitted to charge business clients a greater maximum price than they already can.
A second tailored support package for companies in high-energy users like the steel industry as well as those in susceptible industries like hospitality is anticipated in addition to the base plan.
Source: Market Watch
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