To help to alleviate the economic impact of inflation and rising energy costs for businesses, the U.K. government launched the Energy Bill Relief Scheme. While this did not go as far as many small businesses hoped, it did aid firms struggling with energy costs.
The scheme is scheduled to remain in place until March 2023. The decision has been taken to cut the support offered to businesses. This is expected to be halved, placing further strain on business owners. The company NerdWallet has considered the likelihood for business energy support to be halved by the U.K. government to firms, with the measures adopted from April 2023.
In discussion with Digital Journal, Connor Campbell from NerdWallet explains the full impact. Back in September 2022 wholesale electricity and gas unit prices were capped at £211 per MWh and £75 per MWh respectively.
The changes are likely to have an adverse impact of firms. The NerdWallet survey finds that almost half (45 percent) of business owners are concerned about business closure due to the energy crisis, with just over half (54 percent) feel concerned about the future of their business once the government support scheme comes to an end.
NerdWallet’s business finance expert, Connor Campbell, explains further: “The energy crisis has placed uncertainty on the shoulders of small business owners across the country throughout 2022, and is unfortunately likely to continue throughout this year.”
Spelling it the bad news for many firms, Campbell states: “Increased energy bills have left businesses struggling to remain open, keep their lights on, and keep their premises heated appropriately.”
Drawing on the change to government legislation, Campbell adds: “The government scheme announced in September 2022 provided some short-term reassurance, but as we approach the end date for the scheme, many businesses will now be feeling more uncertain than ever about their future”
In terms of what businesses can expect, Campbell warns: “Recent suggestions have pointed towards the support provided to businesses being halved in an attempt to protect public finances from the pressures of the current energy markets.”
For how businesses should respond, Campbell predicts: “For small businesses awaiting the Chancellor’s decision to determine whether they can remain in operation, this news is sure to provide a devastating blow to their confidence starting out in this new year.”
Campbell continues with his speculations: “Whilst the full details of the new support scheme have yet to be unveiled, if these suggestions are true, many small businesses across the UK will sadly be forced to close from April onwards due to the higher energy costs.”
