The Government has announced a cut-down level of support for businesses with their energy bills from April.
Chancellor Jeremy Hunt said its new Energy Bills Discount Scheme would give firms and others “the certainty they need to plan ahead.”
But the reduced level of help - branded "criminal" by Labour - threatens to leave many businesses facing a bill shock.
Martin McTague, national chair of the Federation of Small Businesses, branded the new scheme a “huge disappointment”.
He added: “Many small firms will not be able to survive on the pennies provided through the new version of the scheme.
“This is so out of touch.”
The government’s current scheme caps the unit cost of gas and electricity for all businesses, and expires at the end of March.
The Treasury said this “unprecedented package of support” for non-domestic users through this winter was worth £18billion.
It will be replaced with a new scheme that offers a discount on wholesale prices until March 31, 2024.
According to the Treasury, it will cap the cost at £5.5billion.
It said: “The new scheme therefore strikes a balance between supporting businesses over the next 12 months and limiting taxpayer’s exposure to volatile energy markets.”
Eligible non-domestic customers - including businesses, charities, and the public sector - who have a contract with a licensed energy supplier will see a unit discount of up to £6.97 per megawatt hour 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.
A “substantially higher” level of support will be provided to businesses in sectors identified as being the most energy and trade intensive – predominately manufacturing industries.
Customers do not need to apply for their discount.
Tom Thackray, director for decarbonisation policy at business lobby group the CBI, said: “The extension to the scheme will provide respite for many firms at the start of the year and help them plan ahead for the next 12 months with more certainty.
“It’s unrealistic to think the scheme could stay affordable in its current form, but some firms will undoubtedly still find the going hard.”
Gareth Stace, director general of trade body UK Steel, said the new scheme would provide “some important certainty and stability for steel producers’ production costs during this extremely difficult economic climate.
“Steel production is highly energy and trade intensive, and the extended support will provide a critical shield against high energy prices, which will continue this year and beyond.
“However, there will be concerns that the newly announced support falls short of that of competitor countries, including Germany.”
Shadow Treasury Minister Abena Oppong-Asare blasted the Tories, saying: “They have strung businesses along, playing for time… living day to day, crisis to crisis.
“It is criminal that this sticking plaster politics has forced British businesses into the same cycle - firms unable to plan, not knowing what the next month will bring, let alone the next quarter.
“Businesses and their staff have faced two Christmases wracked with worry because of Covid and half-baked announcements from this government.”
