Chancellor Jeremy Hunt has reportedly asked Treasury officials to explore ways of prolonging into April & beyond the government’s protection of firms from their rocketing energy bills.
According to the Financial Times, ministers are seeking ways for the government to continue energy subsidies for enterprises, and step down from the Chancellor’s insistence in last month’s Autumn Statement that existing support will be severely limited after 20 March. By that time, the Treasury estimates public outlay on supporting private business’s energy bills will stand at £ 29 billion.
Widening the distribution of support to enterprises outside vulnerable, high-consuming sectors such as glass, cement and chemicals manufacturing is among options under consideration, according to the paper.
The complexities of targeting continued streams of aid to specific industries are said to mitigate for a more ‘universalist’ approach.
Such a switch is understood to entail reducing the levels of existing support.
The Federation of Small Businesses has warned of widespread bankruptcies if Hunt stick to the March expiry date for existing price-capping. Its research arm believes almost a quarter of firms may risk closure, without continued intervention by the government.
While Hunt envisages domestic bill payers benefitting from a price cap until April 2024, enterprise support to that date is currently regarded by the Treasury as unsustainable.
Industry and energy ministry D-BEIS has been more receptive to pleas from UK plc, according to Whitehall insiders.
Grant Shapps’ department has reportedly pressed suppliers for more information on the criticality of energy costs to different classes of industrial users. But results have been disappointing.
“[As suppliers], we are not very skilled at granular data on users,” one power company executive told the newspaper.