(Bloomberg) -- Many British businesses face dire risks when the government tightens its energy support package in April, industry groups told a parliamentary committee Tuesday.

Hospitality companies could see an average of 85% increase in their power and gas bills from April, said Kate Nicholls, chief executive of UKHospitality. Small businesses could be at particular risk.

“You’ve got lots of business locked in at very high rates” from last summer’s highs, Nicholls said at a hearing of the Business, Energy and Industrial Strategy Committee. “The cliff edge has been shaved off slightly, but for many businesses they will still see a significant increase in costs.”

Europe’s energy-supply crunch has fueled historic inflation, stoking a cost-of-living crisis. The UK has provided some relief, though it will be scaled back in April as the government aims to reduce its fiscal burden that’s lifted borrowing levels.

Energy-intensive businesses like chemicals firms are investing heavily in efficiency measures, but many could move abroad because of costs, said Stephen Phipson, head of manufacturers’ group Make UK. About 13% of manufacturers are operating at break-even and will close if energy-bill support is withdrawn, he said.

Amid the market turmoil, the long-term sustainability and attractiveness of the country’s retail market is “a concern,” said Jonathan Brearley, chief executive officer of regulator Ofgem. He cited Shell Plc’s strategic review, which could lead to its exit from the sector in the UK, Netherlands and Germany.

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