UK introduces £5.5Bln cuts on energy subsidies for businesses

By Al Mayadeen English
Source: Agencies
9 Jan 2023 22:33

The new financial plan is expected to last for the next 12 months.

Facility of UK finance ministry, HM Treasury. (Government sources)

The British ministry of finance announced on Monday the government is planning to cut support for businesses in energy subsidies to 5.5 billion pounds ($6.7 billion) - a massive downgrade compared to the current six-month support program which allocates £18 billion in energy subsidies.

This new financial plan is expected to last for the next 12 months, the ministry added.

The move comes in the backdrop of recent statements delivered by Chancellor Jeremy Hunt regarding the present subsidy program which he regarded as "unsustainably expensive" and prompted many businesses to anticipate fatal cuts.

"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."

Two years after Brexit, the British economy has declined rapidly, with its GDP falling by 5.5 percent and an estimated loss of 33 billion pounds ($4.7 billion).

With the UK joining the western haul on sanctioning Russia and deliberately damaging its own relations with China, the cost of living and the energy crisis has been exacerbating further and further in a downward spiral both economically and politically.