Rishi Sunak will next week announce a new system of support for companies’ energy bills, with all UK businesses to be given a discount on the cost of their power from the spring.
The government will also provide more generous targeted support for energy-intensive industries such as steel and ceramics to help them deal with soaring bills, caused by Russia’s invasion of Ukraine.
The overall package will be set at a lower level than the current six-month-long business energy scheme, which is set to cost about £20bn by the time it expires at the end of March.
In his Autumn Statement, chancellor Jeremy Hunt said most businesses would not receive extra support after April, arguing that subsidising their costs was “not sustainable”.
But Hunt is now taking a more generous approach amid fears that the energy crisis will continue well after the spring, with some analysts warning that next winter may prove even tougher for the UK’s infrastructure and businesses.
Business groups have maintained pressure on ministers to prolong the current regime, under which all employers have benefited from a cap on energy prices.
The new scheme will be modelled in a different way, however. In contrast to the current cap on how much any company pays for energy, businesses will instead be offered a discount on the wholesale price of power.