Federation of Small Businesses in Essex warns against end of the Energy Bill Relief Scheme
The current scheme is being replaced by the Energy Bills Discount Scheme
The Federation of Small Businesses in Essex is warning that the end of the Energy Bill Relief Scheme on Friday could potentially threaten small businesses across the country.
What's happening to support for businesses?
This Friday it's expected that the Energy Bill Relief Scheme (EBRS) is being replaced by the Energy Bills Discount Scheme (EBDS).
According the Federation of Small Businesses, this change could potentially threaten 370,000 small businesses as they contend with high energybills.
Ann Scott, Development Manager for Essex, explains more: "those who signed a new contract in August of last year would have received a reduction of £60,000 on an estimated bill of £85,000 under the outgoing scheme, but under the incoming scheme, that same business would only receive just over £2000 in support, leaving a bill to settle of nearly £83,000.
So in essence it's a reduction of 95% in support from the government."
She adds: "Research from the Federation of Small Businesses has found that 24% of small businesses are locked into energy contracts that were signed at the end of last year at a time when wholesale prices were soaring.
"Over a quarter of this group could potentially have to downsize, rethink their business model, even close when they're hit by this rise in energy costs."
Could this impact anyone else?
According to Ann: "We could see consumers being hit as well because some small businesses will be faced with no other choice but to raise those prices to cope with soaring bills, and that's going to drive inflation."
What are those opposed to the change calling for?
The Federation of Small Businesses has called for small businesses to be allowed to work with energy companies to allow them to renegotiate their contracts that they signed at the end of last year.
The hope is that this would allow them to benefit from the significantly lower wholesale energy prices that we're currently seeing.
The not-for-profit is also calling for government to support small businesses in their move to net zero. The Federation of Small Businesses would like to see government to provide small businesses with a voucher of up to 5000 pounds, which they can invest in energy saving or even energy generating initiatives.
What has the government said?
The government has said: "The government has been clear that current levels of support were time-limited and intended as a bridge to allow businesses to adapt.
Wholesale gas prices have now fallen to levels just before Putin’s invasion of Ukraine and have almost halved since the current scheme was announced.
The EBDS therefore strikes a balance between supporting businesses over the next 12 months and limiting taxpayer’s exposure to volatile energy markets, with a cap set at £5.5 billion based on estimated volumes."