Businesses may go bust after April this year, because the government is halving the amount of money it is providing to support them with their energy bills.

The total level of government support is expected to fall by more than half from the £18.4bn the current six-month scheme is estimated to have cost by the time it ends.

Chancellor of the Exchequer Jeremy Hunt told industry leaders last week that the current scheme to support businesses was “unsustainably expensive”.

So the scheme, which caps the unit cost of gas and electricity for all businesses, will be replaced at the beginning of April with a new scheme that offers a discount on wholesale prices rather than a fixed price. The new scheme is expected to run until March 2024.

Hunt was challenged on the usefulness of the scheme – but claimed that the government’s aim was to bring down inflation because that would have a better benefit for business.

And he said Ofgem had been tasked with investigating whether the system was working properly because it was understood that firms are not yet benefiting from falls on the wholesale cost of gas:

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