Cheshire businesses will struggle if Government don’t provide Energy support in April

By Rich Wilcock

30th Jan 2023 | Enterprise

Cheshire Industries could suffer slump unless help is found (Image - Unsplash)
Cheshire Industries could suffer slump unless help is found (Image - Unsplash)

The government recently announced the launch of the Energy Bills Discount Scheme for all eligible businesses but the scheme and the relief it will provide will not be enough according to the Federation of Small Businesses.

From April 1st, the Government will be phasing out the current scheme which saw energy bills capped in a blanket fashion and replacing it with a scheme which would see automatic reductions for businesses if the price of energy is above £107 per MWH for gas and £302 per MWh for electricity. The reduction will be £6.97 per MWh for gas and £19.61 per MWh for electricity. This reduction applies to businesses, charities and public sector bodies. The scheme will run for a year, finishing in April 2024.

However, the chairman of the Federation of Small Businesses, Martin McTague criticised the government plans "The Energy Bill Relief Scheme (EBRS) is 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."

His comments were echoed by the Director of Devolved Regions for the FSB, Colin Borland who fears that the new scheme will not scratch the surface of the real help needed "Around two thirds of firms (63%) could, at very most, theoretically access £200. For context, one of our members runs a café and shop and their energy bills have soared from £2,000 to £8,000 a year. Under £50 off a rise of over £6,000 isn't going to scratch the surface."

The reality of a hard winter and the soaring cost of inflation is affecting Cheshire and the North West businesses like they are across the country.  According to research from Uswitch, more than a third of northern businesses will need to take drastic action such as cutting staff, restructuring or closing altogether if no further support is forthcoming. And 47% of businesses will have to raise prices unless they get further support.

Chancellor of the Exchequer, Jeremy Hunt defended the scheme, saying "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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