Industry associations including UKHospitality, the British Independent Retailers’ Association, the Federation of Small Businesses and the British Chambers of Commerce have all stated that while the support is much needed, other strategies also need to be put in place to ensure the survival of small businesses across the country.
FSB Tina McKenzie, policy and advocacy chair, Federation of Small Businesses (FSB) said the bill will be of considerable help to small firms that have been crying out for months for measures to limit the pain caused by spiralling energy prices.
But she warned a tough year remains ahead for many small firms.
“Many have been waiting for details on the energy bills support package to plan confidently for the winter and beyond, so it’s encouraging to have the clarity from Government on the form that its support will take,” she said.
“The next stage will be for small businesses to learn what the changes mean for their current contracts and for any offers they have been looking at, but waiting to decide what to do.
“Subsidising the unit costs of electricity and gas for six months is welcome, but there are those who miss out from before the six-month period, and help must not result in a cliff-edge afterwards. We are calling for a hardship fund to be created for those who fall outside of the current support, or for whom the current support will be insufficient.”
Ms Mckenzie said there will be a hardship for some businesses that signed fixed contracts after prices rose but before April, which find themselves excluded from the scheme.
“FSB calls on energy suppliers to allow those customers to switch without charge to new fixed contracts, covered by the Energy Supported Price, if that makes the difference for the small business to survive,” she said.
“For all businesses that fall outside the scope of the support, or where the help is insufficient for the business to be viable, we urge Government and energy providers to introduce a discretionary funding pot, similar to the £150 million created for those households who don’t pay council tax. The remainder of the Covid Additional Relief Fund — due to be taken back by the Treasury next week — could be used for this purpose.”
UKHospitality chief executive, Kate Nicholls, said the organisation is “relieved” the government listened to the representations that UKHospitality has stridently delivered, relating to the problems that the sector is experiencing with energy suppliers.
“This intervention is unprecedented and extremely appreciated as we head into an uncertain winter with numerous challenges on many fronts,” she said.
“The inclusiveness of the supports announced — covering businesses small and large — will be extremely beneficial to the sector. A sector that provides a huge number of jobs, many of which are now more secure.
“We will not relent in our pursuit of a more comprehensive package to safeguard businesses and jobs. The levers of reduced VAT and business rates reliefs are still available to the Government, and there must also be a comprehensive package to ensure that there is no cliff edge when these measures fall away.”
Bira’s CEO Andrew Goodacre said the energy package “will be a relief to all independent retailers on the high street as they can now focus on the very important final quarter of the year”.
“Our focus also now turns to helping the government determine which businesses are vulnerable due [to] the energy increases as we feel indie retailers fall into this category,” he said.
“BIRA has been very vocal in asking for the details of this support and independent retailers can look forward to lower than expected energy bills. We now want to turn our focus on determining the businesses classed as vulnerable as we know they will receive longer term support. Rather than individual businesses, we need to show that the high street is a collection of businesses that support each other to make the place successful. No high street wants to see lots of empty shops so we need to focus on the vulnerability of the ‘place’.”
Shevaun Haviland, director general of the BCC, said the support package is significant and will ease the cost pressures that have been piling up on businesses.
“It will allow many firms that were facing closure, or having to lay off staff or reduce output, to keep going through the winter,” she said.
“But the exact level of support will vary greatly from business to business depending on the detail of its contract, so some will inevitably do better than others.
“We now need action to get this saving passed onto business as soon as possible — every day will put some firms closer to the edge and they cannot hang on much longer.
“There must also be effective legal oversight to ensure no firms that are due this money miss out.
“For those that will benefit, six months support is not enough for most firms to make plans for the future.
“We understand there are a range of unknowns for the Government in looking ahead, but without that reassurance very few firms will make plans to invest or grow.
“Some businesses will still struggle to meet their bills despite this government intervention, the Chancellor must prioritise those firms in his mini-budget on Friday.”
