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Energy support is set to be slashed for millions, as Chancellor Jeremy Hunt prepares to unveil the support plan for 2023. He is set to unveil another £5 billion of energy help for businesses for the next financial year, which is a sharp drop from last year’s £18billion package. The Chancellor will set out the plans for the support later today, which will kick in from April 2023.<\/p>\n
While the Government is unveiling support for another year, it will in effect be a drop in support from what is currently offered.<\/p>\n
Rather than tapering the support down, the new package of support will be a sharp drop from what is currently offered.<\/p>\n
Under the current systems, firms are given a price per unit of electricity.<\/p>\n
But under the new system, firms will receive a discount on each unit of gas and electricity.<\/p>\n
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While the support is being dropped, wholesale gas and electricity prices are also falling, which the Government hopes will close the gap in support.<\/p>\n
Long-term support from 2024 onwards is yet to be confirmed but is likely to depend on how much further gas prices fall.<\/p>\n
The Chancellor is also expected to announce more generous targeted support for energy-intensive industries, such as steel and ceramics, under the new scheme.<\/p>\n
Speaking about the upcoming package of support, a source told the Telegraph: “The Government is subsiding every household and business with their energy costs. It is not sustainable in the long run.<\/p>\n
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“It means the Government has less space to focus on other priorities like lowering the tax burden. That is the raw reality.”<\/p>\n
The changes to support levels come after the Government put in place a review in order to “ensure longer-term affordability” and taxpayer “value for money”.<\/p>\n
A Treasury spokesperson said: “We are protecting businesses from high energy costs this winter, caused by Putin’s invasion of Ukraine, through the six-month £18 billion Energy Bill Relief Scheme.<\/p>\n
“However, this is very expensive, and we need to ensure longer-term affordability and value for money for the taxpayer.<\/p>\n
DON’T MISS: <\/strong> “That is why we are currently carrying out a review with the aim of reducing the public finances’ exposure to volatile international energy prices from April 2023.<\/p>\n “We will announce the outcome of this review in the New Year to ensure businesses have sufficient certainty about future support before the current scheme ends in March 2023.”<\/p>\n The UK has been grappling with soaring energy prices and double-digit inflation in the aftermath of the coronavirus pandemic and Putin’s invasion of Ukraine.<\/p>\n The country has seen a fall in living standards as people continue to be hit with declining pay, higher taxes and soaring bills.<\/p>\n But economists from thinktank Resolution Foundation wanted that households are facing a “groundhog year” in 2023, with disposable incomes expected to fall even further this year.<\/p>\n They warned that living standards are likely to get “far worse” before they improve.<\/p>\n Resolution Foundation chief executive Torsten Bell said: “From a cost of living perspective, 2022 was a truly horrendous year – far worse than any year in the pandemic or financial crisis.<\/p>\n “2023 should see the back of double-digit inflation, but it looks set to be a groundhog year for many families whose incomes look set to fall by just as much as they did in 2022.”<\/p>\n Mr Bell said many families will be helped by benefits and the National Living Wage rising, both by around 10% next April.<\/p>\n
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