Small businesses at risk as energy costs rise

The end of the Energy Bill Relief Scheme (EBRS) on 1 April could threaten the future of hundreds of thousands of small firms, according to research by the Federation of Small Businesses (FSB).

The Energy Bill Discount Scheme (EBDS) offers a far lower level of support for small businesses.

Although market prices have stabilised for those fixing their contracts now or those who are on variable tariffs, businesses that fixed last year will see huge increases as they are locked into a high price before the government's relief.

A business paying £24,528 per year for energy under the old government support scheme will now pay £82,539 under the new scheme.

The FSB is calling for small firms to be allowed to renegotiate their energy contracts that were fixed last year. It is also calling for additional support for businesses to become more energy efficient.

Tina McKenzie, Policy Chair at the FSB, said:

'The jump in energy bills on April Fool's Day won't be a laughing matter but will be a shock to hundreds of thousands of small businesses, who signed up to fixed contracts when the government discount was guaranteed under EBRS.

'There's much that could and should be done rather than leaving small firms high and dry. Allowing the most vulnerable small businesses to renegotiate or 'blend and extend' their energy contracts to better reflect lower wholesale energy prices is the least the government and energy suppliers could do.'

Internet link: FSB website