Energy support changes will 'send a ripple of fear' through many Ross-shire businesses, warns FSB Highland chief
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Talking about the announcement on energy price support for smaller businesses, the Federation of Small Businesses’ Highlands & Islands development manager, David Richardson, said: “Yesterday’s announcement about the changes to energy support for smaller businesses will have sent a ripple of fear through many businesses in Ross-shire and the wider Highlands.
“The reduced support is very obviously going to hit smaller firms’ pockets hard, for it is totally insufficient for all, and especially for energy-hungry businesses like those in tourism and hospitality, food and drink processing, manufacturing, and so on.
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“Not only that, but the FSB has repeatedly warned the UK Government about the consequences of having a cliff edge when the current support comes to an end on April 1.
"In particular, we pointed to our own FSB research, undertaken before yesterday’s announcement, which found that a quarter of smaller businesses across the UK believed that they would need to close, downsize or radically restructure if a cliff edge were to happen. And here we are with a cliff edge, the capping stopping one day and the discounting starting the next.
“Moreover, the replacing of the energy price cap with a discount on the fluctuating wholesale price of the moment is not only inflationary, it destroys the certainty that businesses crave, and lack of certainty damages business confidence, which in turn stifles investment and is bad for Ross-shire’s economy. We live in extremely difficult times.”
What exactly was announced this week?
The Government has announced a new Energy Bills Discount Scheme (EBDS) from April 2023 to April 2024 for eligible non-domestic consumers in Great Britain and Northern Ireland.
The current Energy Bill Relief Scheme announced in September comes to an end in March 2023. It supports businesses and public sector organisations such as schools and hospitals by providing a discount on wholesale gas and electricity prices.
Eligible non-domestic customers facing significantly inflated gas and electricity prices in light of global price pressures, triggered by Russia’s invasion of Ukraine, have benefitted from the discount since October 1, 2022.
On October 17, it was announced that an HM Treasury-led review of the scheme would determine support beyond March 2023.
The government has been clear that current levels of support were time-limited and intended as a bridge to allow businesses to adapt. Wholesale gas prices have now fallen to levels just before Putin’s invasion of Ukraine and have almost halved since the current scheme was announced. The EBDS therefore strikes a balance between supporting businesses over the next 12 months and limiting taxpayer’s exposure to volatile energy markets, with a cap set at £5.5 billion based on estimated volumes.
More on the Energy Bills Discount Scheme
Source: www.gov.uk
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