Reduced energy bill support puts SMEs at risk

Around 370,000 SMEs are at risk of downsizing or even closing their doors once the energy bill relief scheme (EBRS) ends, warns the Federation of Small Businesses (FSB).

While market prices have stabilised for businesses fixing their energy contracts now and those on variable tariffs, around 28% of SMEs fixed their contracts last year.

These firms will see their energy bills increase steeply once EBRS is replaced by the energy bills discount scheme (EBDS) on 1 April. For example, a pub paying £24,528 in energy bills last year could see their bills treble to £82,539 this year.

The FSB is urging energy companies to let small firms "blend and extend" their contracts so they can benefit from the lower wholesale energy prices now available.

In the longer term, the FSB asked the Government to launch a "help to green" scheme - helping businesses both invest in energy-efficient measures and reduce their energy bills.

FSB policy chair Tina McKenzie said:

"The jump in energy bills in April will be a shock to hundreds of thousands of small businesses.

"This cliff-edge will also hit consumers as businesses will have to raise prices to cope with soaring bills, driving up inflation."

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