Huge cuts in help with energy costs for businesses were announced by Chancellor of the Exchequer, Jeremy Hunt on the 9^th January. Non-domestic users (including schools, businesses and charities) will receive a discount on the wholesale price of gas and electricity but some businesses with lower energy charges will not get any help at all.

Despite assuring business leaders that there would be transitional support, the Federation of Small Businesses said ‘What’s certain from this catastrophic move is there’ll be a cliff edge after March. The small fish and chip around the corner, your local pub, and the family-run independent laundrette – all will see much higher bills. That’s on the Government.’

Martin McTague, National Chair of the Federation of Small Businesses (FSB) added the decision ‘to all but eliminate help through the Energy Bill Relief Scheme (EBRS) is a huge disappointment for small businesses. For those struggling, the discount through the new version of the scheme is not material. Many small firms will not be able to survive on the pennies provided through the new version of the scheme…This is so out of touch. Two pence off a kWh of electricity and half a pence off gas is totally insignificant for small businesses, despite costing billions to the taxpayer. While the New Year should be a time of optimism and excitement, 2023 looks like the beginning of the end for tens of thousands of small businesses, which have been relying on the government energy support to survive this winter.’[i]

Tina McKenzie, FSB Policy Chair, also said ‘With the current 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’ She added ‘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.’ [ii]

Councillor Shoab Akhtar, Cabinet Member for Employment and Enterprise said ‘Oldham’s businesses have been let down by the Government’s decision to slash help with energy costs from April 2023. I share the FSB’s concern that small businesses are the least able to cope with cost pressures and I know that many Oldham businesses are finding it hard to keep going even with the help in place until the end of March. Very worryingly, a recent FSB survey found that a quarter of small businesses think their business is at risk if energy support dries up after March.’

Councillor Akhtar added ‘The vast majority of Oldham’s businesses are micro businesses or small businesses and I am really worried that they will suffer a double whammy of increased costs and lower customer demand driven by the cost of living crisis which is hitting us hard. The FSB also found that most small businesses are already struggling to pass on increased costs. Business closures will only reduce Government income and increase demand on welfare services. I urge the Chancellor to think again and come up with a strategy to help business through the perfect storm of rising costs and low demand.’