The Government’s reduced energy support package for UK businesses will result in thousands of businesses closing and jobs being lost, according to the Night Time Industries Association (NTIA).

HM Treasury said the new scheme will provide business energy users with a discount on wholesale energy prices until 31 March 2024. The current scheme, due to stop at the end of March, caps the unit cost of gas and electricity for all businesses.

The Government said the current “unprecedented” support package was worth £18 billion; the equivalent to the cost of an increase of around three pence on people’s income tax.

It said, “The Government has been clear that such levels of this support, unprecedented in its nature and huge scale, were time-limited and intended as a bridge to allow businesses to adapt. The latest data shows wholesale gas prices have now fallen to levels just before Putin’s invasion of Ukraine and have almost halved since the current scheme was announced.

“The new scheme therefore strikes a balance between supporting businesses over the next 12 months and limiting taxpayer’s exposure to volatile energy markets, with a cap set at £5.5bn. This provides long-term certainty for businesses and reflects how the scale of the challenge has changed since September last year.”

From 1 April 2023 to 31 March 2024, eligible non-domestic customers who have a contract with a licensed energy supplier will see a unit discount of up to £6.97/MWh automatically applied to their gas bill and a unit discount of up to £19.61/MWh applied to their electricity bill, except for those benefitting from lower energy prices.

NTIA CEO Michal Kill is among those who has strongly objected to the move. He said the announcement suggested the Government is out of touch with businesses: “Even under the current relief scheme, greedy, profiteering energy companies are subjecting businesses to over 400% increase on previous energy bills.”

“All of this in light of the fact that gas/oil wholesale prices in recent months have dropped below the levels prior to Russia’s invasion of Ukraine.”

“The scaling back of the energy relief scheme by Government at the end of April, will without doubt mean thousands of businesses and jobs will be lost in the coming months.”

Chancellor Jeremy Hunt said, “Wholesale energy prices are falling and have now gone back to levels just before Putin’s invasion of Ukraine. But to provide reassurance against the risk of prices rising again we are launching the new Energy Bills Discount Scheme, giving businesses the certainty they need to plan ahead.

“Even though prices are falling, I am concerned this is not being passed on to businesses, so I’ve written to Ofgem asking for an update on whether further action is action is needed to make sure the market is working for businesses.”