Business groups call for clarity on EBRS closure

Leading business organisations are urging the government to shed some light on what small businesses can expect when the Energy Bill Relief Scheme (EBRS) closes in March.

On Wednesday, chancellor Jeremy Hunt said he intends to reduce state support for business energy costs in the spring, but did not make clear what will be offered after the expiration date.

The Federation of Small Businesses (FSB) and the British Chambers of Commerce (BCC) are calling on the government to offer more detail, sooner rather than later.

Tina McKenzie, policy chair of FSB, said its members are being left in the dark and can’t afford a cliff-edge scenario that would force a raft of business failures. “With the current EBRS scheme ending in three months, it’s been impossible for small firms to plan their 2023. We’ve heard countless examples of small businesses on the brink of collapse because of sky-rocketing energy bills and the lack of assurance from the government on energy support.

“Let’s not forget this energy price crisis affects all small businesses, which typically have lower margins and are least able to deal with cost pressures. That’s why we want to see an extension of the energy support scheme which takes into account the size of the business, rather than one focused on specific sectors.”

BCC Director General, Shevaun Haviland, also warns against the the April cliff-edge, saying businesses are desperate to know what they will be facing.

“An announcement in the coming days on the exact shape of the assistance cannot come soon enough for many, with thousands fearing closure if it is not extended.

“More than a third of firms have told us they are finding it difficult to pay their energy bills even when they are in receipt of government support.”

The EBRS in its current form was designed to run for six months from October 2022 and capped the cost of electricity for businesses at £211 per MWh and electricity at £75 per MWh.

Analysts at Cornwall Insight predict that costs will have fallen below the level of government support by the summer, with electricity at £191 per MWh and £91 per MWh for gas.