Companies that consume a lot of energy should receive more government support for electricity costs.
Ministers said a compensation scheme for energy-intensive industries will be extended for another three years and its budget will be more than doubled.
The support comes as businesses and households are hit by higher energy bills, driven by rising global wholesale gas prices.
UK Steel said the extension of support was “much needed”.
In addition to steel manufacturers, other energy-intensive industries such as paper mills are also to receive the money.
The Government said the extended support would come on top of the £2 billion it has already made available since 2013 to help such businesses with the price of electricity bills.
- Businesses are urgently asking for help with energy bills
The Department for Business, Energy and Industry has not confirmed how much the expanded support will cost, but Industry Secretary Lee Rowley said the government is offering “higher compensation to eligible companies”.
He said the government wants to “keep Britain at the forefront of manufacturing” and said the law will help energy-intensive industries that employ thousands of people “remain competitive and sustainable in the long-term”.
The scheme relieves companies of the costs of the UK emissions trading scheme and carbon price support mechanism on their electricity bills and now offers support to companies that make batteries for electric vehicles.
UK Steel’s chief executive, Gareth Stace, said the three-year extension of the compensation scheme and the increase in relief levels “meet a long-standing demand from the industry and give the UK steel sector a much-needed cut in electricity costs”.
In January, five business groups wrote to Chancellor Rishi Sunak asking for support for businesses and consumers as energy costs began to rise and before rising further in the wake of the Russian invasion of Ukraine.
The five groups – the British Chambers of Commerce, the Confederation of British Industry, the Federation of Small Businesses, the Institute of Directors and Make UK – said businesses were likely to face further costs as existing fixed-rate contracts expire.
They said looming price increases could push millions of people into energy poverty.
“Small and medium-sized businesses are most at risk. Many companies will have little choice but to pass the cost on to their customers, adding to further inflationary pressures,” the group said.
Inflation is at its fastest in 30 years, fueled by rising food costs and energy bills.
Add Comment