UK cuts energy support for business to 5.5 billion pounds

LONDON (Reuters) – The UK on Wednesday announced that it would cut £5.5bn (£6.7bn) of energy subsidies for businesses next financial year after the government described current levels of aid as “unsustainably high”. U.S. dollars) announced plans to downsize.

The current six-month energy assistance program, which expires at the end of March, was expected to cost £18.4bn when the government’s budget watchdog released its forecasts in November.

“My number one priority is to address the rising cost of living, which both families and businesses are suffering from,” said Finance Minister Jeremy Hunt in a statement. It means making the difficult decision to keep inflation under control while supporting it.”

The Treasury Department has been looking at ways to cut energy aid packages in an attempt to stabilize the country’s finances after political and economic turmoil under former Prime Minister Liz Truss’ short-lived government.

UK natural gas prices will begin to rise sharply in late 2021, and will spike after Russia invades Ukraine in February 2022.

Prices have been very volatile since then. Now he’s back to about the same level as he was a year ago, lower than when the current support package was announced, but still several times higher than he was in early 2021.

Hunt said he was concerned that these were not being passed on to companies, even though prices were falling, and wrote to energy regulator Ofgem asking for an update on whether action was needed. said it was sending

The government had originally planned to release proposals for corporate energy assistance by the end of 2022, but the decision has been delayed and some companies have faced uncertainty over energy tariffs.

The new program includes additional support for energy-intensive businesses, primarily manufacturing.

($1 = £0.8199)

Reported by Andrew MacAskill.Editing by David Milliken

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