Hundreds of thousands of small businesses could face “tough decisions” following changes to the energy support scheme, according to the Federation of Small Businesses.
The Energy Bills Discount scheme was introduced to provide UK businesses, charities and the public sector with energy bill support.
This scheme for non-domestic energy users will see rebates given on high energy bills until March 31, 2024.
Until now, the Energy Bill Relief program has capped energy costs, but the new support measure will only see reductions in bills.
The Federation of Small Businesses (FSB) estimates that around 370,000 small businesses will be negatively impacted.
Craig Beaumont, the FSB’s external affairs chief, told Sky News that these small businesses will face “tough decisions” in the months ahead.
He said: “We will see some small businesses reduce their opening hours, some will have to lay off staff or consider other major expenses.
“We expect some small businesses to close completely.”
Mr Beaumont added that the new support scheme “will not help their bills”.
He said: “The government’s first energy program was a fixed price, this second program is just a small discount, which means that before you would have reduced your bill to around 25% of what it would have summer, your new bill will be almost exactly where it was last August.
“For a specific group of businesses, that’s really bad news – if you’re variable rate or out of contract, you’re fine.
“But if you get fixed – especially if you did it last August – you’re in serious trouble.”
Ruby Byrne, owner of Ruby B Salon, told Sky News her ‘worst-case scenario’ was so cost-ridden she had to sacrifice the service she provided to her customers.
She is already considering solutions if she is struggling to pay her bills.
Ms Byrne said: “In the 13 years I’ve been open I’ve only raised my prices once.
“I may have to do it again, which will affect the clients I get, if they come back and how often they come.
“It’s obviously going to affect my business.”
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A government spokesperson told Sky News: ‘Businesses large and small will get the basic discount through our new energy bill scheme and won’t need to apply for it, and A higher level of support will be provided to the most energy-intensive businesses and businesses of all sizes.
“While no national government can control the global factors driving up energy prices and other business costs, we continue to support businesses.
“That’s why we’ve provided them and other non-domestic energy users with an unprecedented support package, enabling some businesses to pay around half of expected wholesale energy costs this winter. “
Sky news