British Chancellor of the Exchequer Jeremy Hunt talks to a television crew outside the BBC headquarters in London, Britain, on November 18, 2022. File Photo / Reuters
London: Britain announced plans on Monday to scale back energy subsidies for businesses for the next financial year to 5.5 billion pounds ($6.7bn), after the government described the current level of support as "unsustainably expensive".
The current six-month programme of energy support that will expire at the end of March was predicted to cost 18.4 billion pounds when the government's budget watchdog published forecasts in November.
"My top priority is tackling the rising cost of living - something that both families and businesses are struggling with," finance minister Jeremy Hunt said in a statement. "That means taking difficult decisions to bring down inflation while giving as much support to families and business as we are able."
The finance ministry has been looking at ways to pare back the energy support packages as it tries to stabilise the nation's public finances after the political and economic turmoil under former Prime Minister Liz Truss's short-lived government.
British natural gas prices began to pick up sharply in the second half of 2021, and soared after Russia invaded Ukraine in February 2022.
Prices have been very volatile since. Although they are now back around the same level as a year ago - and lower than when the current support package was announced - they are still several times higher than in early 2021.
Hunt said he was concerned that although prices are falling these are not being passed on to businesses, so he has written to the energy regulator Ofgem asking for an update on whether action is needed.
The government had originally been due to publish its proposals for business energy support before the end of 2022, but the decision was delayed, angering some businesses facing uncertainty over their energy bills.
The new programme will include extra support for some energy-intensive businesses, mostly in manufacturing.
