Jeremy Hunt delays new energy support package for UK business

UK chancellor Jeremy Hunt has been accused of leaving businesses facing “an anxious and uncertain” Christmas after breaking a promise to set out a new energy support package before the end of the year.

Hunt has concluded he needs more time to look at the design of the new scheme, which will involve a big cut in overall taxpayer support for business. It is also awaiting approval from Prime Minister Rishi Sunak.

The chancellor had said he would give details of the scheme, to run from April next year, by December 31, but on Tuesday he told MPs: “We will bring forward an appropriate package early in the new year.”

In September, the then prime minister Liz Truss announced a scheme costing £18bn to subsidise a price cap on companies’ electricity and gas bills, but the arrangements expire at the end of March.

Ministers have said the scheme will not continue in its current form, which would have implied a £40bn cost over an entire year. “The new scheme will be significantly less generous,” said one government official.

The British Chambers of Commerce criticised the delay of the government’s announcement, claiming some companies would be forced to prepare potential redundancies ahead of an expected sharp increase in energy bills.

“Firms deserve far better from government than broken promises for Christmas during these incredible times,” said Shevaun Haviland, director-general at the British Chambers of Commerce. “They now face an anxious and uncertain festive period.”

Businesses were briefed last weekend that ministers were close to finalising plans to help all companies with their energy costs until spring 2024.

Grant Shapps, business secretary, told the BBC on Saturday the details would be released “next week”, but Hunt has since told allies that he needs more time to get things right.

Officials said last week that Hunt was planning to opt for a scheme helping all companies, albeit with a higher price cap and therefore less taxpayer support compared with the existing arrangements.

But Hunt’s allies said he was also considering a targeted scheme, even though it was complicated because energy suppliers do not have key data on their business customers.

Under a more targeted approach, if it could be made to work, the Treasury would look to help more vulnerable sectors such as retail, leisure and hospitality, as well as users with high energy needs.

However it is designed, government insiders said they feared it would be seen as “bad news” by businesses, especially when compared with the current arrangements.

James Cartlidge, Treasury minister, said caution was needed. “We are carrying out a review of the scheme, with the aim of reducing the public finances’ exposure to volatile international energy prices from April 2023,” he added.

Kate Nicholls, head of UK Hospitality, a trade body, said in a tweet that hotels, restaurants and other venues would be disappointed by the delay.

“Businesses are facing daily changing rates and contract decisions in Jan so certainty was really needed,” she said, urging regulators to press energy suppliers to treat business customers fairly.