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Firms ‘left in limbo’ by delay to energy bills support

Martin McTague, FSB chairman
Martin McTague: firms have been asking for certainty

Small businesses say the Government’s decision to delay an announcement on providing further energy support beyond early spring has left them in Christmas limbo.

Downing Street had promised to publish details of its extension to the Energy Bill Relief Scheme (EBRS), which has fixed wholesale gas and electricity prices for firms from October until March 2023.

But it now says the “affordability” of the £18 billion scheme had to be assessed, leaving firms to fear they will be left to struggle through winter.

At the weekend it was reported that the scheme would be extended – but on a much less generous level.

Martin McTague, chair of the FSB, said: “Four days before Christmas, there’s still no confirmation from the Government on whether small firms will continue to be supported on soaring energy bills after the current EBRS ends on March 31 next year.

“Small firms have been asking for certainty on support before Christmas to deal with continued energy hikes, but they are now left in limbo until the new year. 

“If Government is serious about keeping small firms away from the brink of collapse, now is the time to act.

Shevaun Haviland, Director General of the British Chambers of Commerce, said: “Just over a month ago, the Chancellor promised businesses that they would receive a plan on the future of the energy support package before the end of the year. With 24 hours left until Parliament rises, businesses have one simple question: ‘where is this plan’?   

“According to a recent BCC survey, almost half (47%) of UK SMEs said they will find it difficult to pay their energy bills when Government support ends.  

“Firms deserve far better from Government than broken promises for Christmas during these incredibly difficult times. They now face an anxious and uncertain festive period, unable to plan for the New Year.”

A Downing Street spokesman said: “We recognise this is a slightly longer than expected but it is very complex, providing the support to businesses and we want to look at longer term affordability and make sure we get the offer right to businesses for coming forward with detail.

“They can be reassured that the £18.1bn current scheme will continue to provide support up until the end of March.”

Concern over the scheme’s extension comes as business confidence in Scotland fell nine points during December to 15%, according to the latest Business Barometer from Bank of Scotland Commercial Banking.

Companies in Scotland reported lower confidence in their own business prospects month-on-month, down five points at 25%.  When taken alongside their optimism in the economy, down 10 points to 6% this gives a headline confidence reading of 15%. 

Scottish businesses identified their top target areas for growth in the next six months as evolving their offer (36%), investing in their teams (31%) and entering new markets (25%).

The Business Barometer, which surveys 1,200 businesses monthly, provides early signals about UK economic trends both regionally and nationwide.

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