Chancellor Jeremy Hunt is expected this afternoon to reduce the financial support for businesses’ energy costs.
A new scheme will be unveiled today to replace the previous cap on the cost of gas and electricity for all businesses, which runs out in March.
Hunt’s new scheme is expected to include a discount on wholesale prices rather than a fixed price to help energy-intensive industries such as steel, glass and manufacturers.
The chancellor reportedly told business leaders that to maintain the current scheme unchanged would have been unsustainably expensive.
Running the scheme for the six months between October and March has cost an estimated £18bn.
The new arrangement is expected to run for a year before being phased out completely if gas prices allow.
An unseasonably warm winter in Europe and people heeding advice to cut back on energy use have seen the price of natural gas tumble in recent weeks.
Today, the price was £175 per therm compared to more than £600 in August when the crisis really gripped, though experts are warning that prices might rise sharply again as China starts to lift Covid restrictions and the world’s economy picks up.