MANY firms will not survive after the government slashed the support available to help businesses with their energy bills, it has been claimed.
The current support scheme will be replaced in April by a 12-month package which offers a much smaller reduction in costs.
READ MORE: What extra support on energy bills are businesses and charities getting?
According to an example on the government’s website, a pub currently getting £3,100 in support every month will in future receive £190.
Nicky Kildunne, development manager for the Federation of Small Businesses (FSB) in Hampshire, Dorset and Isle of Wight said the decision was 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,” she said.
“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.”
Hampshire Chamber chief executive Ross McNally said: "As we enter what will be a critical year for the UK economy, many businesses will continue to struggle with their energy bills.
"While we welcome the government’s extension of support for 12 months, it is disappointing to see the 85 per cent reduction in the actual financial envelope involved. That is a substantial drop in assistance that will have severe implications and could cause more businesses to close.
"Of course, ministers have to balance the level of support with what is possible given the public finances but it is only by investing in the business community that we will be able to turn the economy round and return the UK to growth and prosperity.
"I believe the government will simply be required to intervene again in the coming months. Hampshire Chamber calls on government to embed a viable energy strategy into a comprehensive, long-term support plan to protect businesses, livelihoods and jobs. Energy market reform is required as a matter of urgency.”
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The government package will automatically apply a discount of £6.97 per MWh to the gas bills of eligible businesses and £19.61/MWh for electricity.
There is more generous support for a list of energy intensive industries.
Chancellor Jeremy Hunt has said: “Wholesale energy prices are falling and have now gone back to levels just before Putin’s invasion of Ukraine. But to provide reassurance against the risk of prices rising again we are launching the new Energy Bills Discount Scheme, giving businesses the certainty they need to plan ahead.”
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