UK Set to Halve Energy Support for Businesses, Times Reports

(Bloomberg) -- The UK government is set to halve the level of support it gives to businesses to help with their energy bills, the Times newspaper reported.

Chancellor of the Exchequer Jeremy Hunt has been weighing how much assistance to provide companies when an existing six-month program of energy support worth £18 billion ($21.7 billion) expires at the end of March. He had initially planned for the aid to become more targeted at vulnerable sectors, but officials in recent weeks indicated he was leaning towards a universal extension of the program, which was designed to shield firms from the pain of soaring costs linked to Russia’s war in Ukraine. 

On Friday, the Times reported that Hunt now plans to announce a 12-month extension in which businesses receive aid at below half the current level, with the new package costing less than £20 billion over the longer time frame. The paper didn’t say how it obtained the information.

Hunt has been paring back Britain’s energy support packages as he tries to stabilize the nation’s public finances, which suffered a shock under the short-lived premiership of Liz Truss.

The Treasury declined to comment. Hunt is considering many options and no final decisions have been made, according to a person familiar with his thinking, who spoke on condition of anonymity.

Under the existing business support program, companies get a saving of up to £345 for a megawatt hour of electricity and £91 for a megawatt hour of gas.

Hunt was due to make an announcement on what would happen from April by year-end but the decision has since been delayed, sparking consternation from businesses facing uncertainty over their energy bills. 

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