Federation of Small Businesses condemns government decision to slash energy bill support

The government is facing criticism over plans to cut support for businesses crippled by soaring energy bills when the Energy Bill Relief Scheme (EBRS) ends in March.

Martin McTague, chairman of the Federation of Small Businesses (FSB), says: “Many small firms will not be able to survive on the pennies provided through the new version of the scheme.”

The new package will see £5.5 billion spent on support for non-domestic customers over the next year, down from the £18 billion committed through the current Energy Bills Relief Scheme.

From October 2022 to March 2023, energy prices are capped for businesses at £211 per megawatt hour (MWh) for electricity and £75 per MWh for gas.

Under the new slimmed down scheme, eligible non-domestic consumers will receive a per-unit discount until March 2024, subject to a maximum discount. Electricity will cost £19.61 per MWh with a price threshold of £302 per MWh and gas at £6.97 per MWh with a price threshold of £107 per MWh.

“This is so out of touch,” says McTague. “Two pence off a kwh of electricity and half a pence of gas is totally insignificant for small businesses, despite costing billions to the taxpayer. The Government will inevitably have to come back.

“The current EBRS scheme provides certainty for a small business owner over their rates and has made a material difference to the survival of many small businesses. The replacement scheme will do neither.”

A recent survey commissioned by FSB found one in four small firms anticipate they will have to close, downsize or radically change their business model when the government reduces energy support after March.