Small business insurance provider Simply Business is calling on the government to increase energy support for SMEs. Its research finds that the price cap rise remains one of the greatest threats to the survival of small businesses in the UK, with rising energy bills putting over half of SMEs (54 per cent) at risk of collapse.
Millions of small business owners are still experiencing increased energy bills at a time when costs are rising in most operational areas. At the same time, with a substantial number of households affected by rising energy bills, consumer purchasing power is going down as people cut back on non-essential spending. SMEs in food and drink, hospitality and retail are most at risk, decreasing revenue and income for small business owners still in the vital post-pandemic recovery period.
As a result, three in five (59 per cent) small business owners are calling on the government to review or reduce the energy price cap. Simply Business says the government could support SMEs further by capping the price per KW or offering the same level of support to businesses as domestic consumers.
Currently, under the Energy Bill Relief Scheme, the price businesses pay for energy is discounted at £211 per megawatt hour (MWh) for electricity and £75 per MWh for gas. The support, which runs from 1 October to 31 March 2023, is automatically applied to all eligible energy bills.
Alan Thomas, UK CEO at Simply Business, comments: “Many small business owners are at breaking point – feeling the crippling pressure of rising costs, energy and fuel prices, alongside their ongoing recovery from the economic impact of the pandemic.
“Our SME Insights Report is a clear indication that small business owners want and need government support, with three in five calling for a review or reduction of the energy price cap.
“The surging cost of fuel and energy, alongside the overall rising cost of living, will understandably see households cut back on non-essential spending. There is a domino effect in place. The impact to consumer purchasing behaviour will trickle through to the books of small business owners, at a time when SMEs need our support the most.”
Simply Business’s SME Insights Report, which polled over 1,000 small business owners, also found that tax and national insurance hikes also pose a threat to 36 per cent of respondents followed by lack of funds or access to credit (22 per cent), marketing and the ability to find customers (26 per cent) and recovering from pandemic related losses (18 per cent).