Energy bill relief scheme plans cold comfort to business

British SMEs are saying they will find it difficult to pay their energy bills once the government’s Energy Bill Relief Scheme ends on 31 March 2023, as confirmed in the Autumn Statement last week. 

A new survey from the British Chambers of Commerce (BCC) found that 47 per cent of small and medium enterprises said they will have trouble paying their bills, and 4 per cent said they won’t be able to pay them at all. 

The Energy Bill Relief Scheme (EBRS) began on 1 October, giving a discount in p/kWh on wholesale gas and electricity prices for all qualifying non-domestic consumers, for six months. 

However its fate after the March deadline remains unclear as the Treasury plans to review next steps. It is expected that the overall scale of support the government can offer will be significantly lower, and targeted at those most affected.

According to the Federation of Small Businesses (FSB), 96 per cent of the companies it represents are concerned about rising energy costs. FSB national chair Martin McTague said:

“While the current package will help them through a hard winter, they need clarity as soon as possible on whether there will be support beyond that. We’ve seen countless examples of small businesses struggling with energy bills to the point where owners stop paying themselves wages – or even shrink or close their business.”

Commenting on the survey findings, Shevaun Haviland, director general of the BCC, said: “While current government support is welcome, there is a cliff-edge looming, and firms will struggle to see beyond it. They need certainty on what will happen in April so they can plan with increased confidence.

“Government should not forget those businesses that will not benefit from a new energy package but will continue to require support once the current scheme ends. There are other levers that government can pull to relieve cost pressures, such as a reform of Business Rates to compensate firms that see energy support reduced or phased out.

“There is also a lack of competitiveness in the business energy market. Firms are struggling to get quotes from different providers, and they are not guaranteed access to fixed-rate contracts.”

Anthony Ainsworth, Chief Operating Officer at npower Business Solutions, commented: “The Chancellor confirmed that a new targeted approach to supporting businesses beyond April – when the current Energy Bill Relief Scheme ends – will be announced by the end of the year. The uncertainty of what this could mean for many businesses beyond this date is hugely impacting confidence, and, while the additional funding for energy efficiency is welcome, it is still two years away. Businesses need more immediate help to implement measures that will both reduce energy demand and emissions, to enable them to invest with confidence.”