Companies are being "left in the dark" by the Government's postponement of a decision on extending support for energy bills, business groups have said.
The Federation of Small Businesses (FSB), the North East England Chamber of Commerce and the British Chambers of Commerce have all called on the Government to make clear its intentions, just days after Chancellor Jeremy Hunt was reported to be mulling plans to retain the existing Energy Bill Relief Scheme which offers a discount on gas and electricity unit prices. Research from the FSB suggests thousands of small firms could be forced to close or downsize if the scheme is not extended beyond its current March 31 end date.
Mr Hunt had recently indicated that businesses could expect an announcement before or just after Christmas, but the Treasury has confirmed that will now come in the New Year. The British Chambers of Commerce say companies now face an "anxious and uncertain festive period" and that without a clear plan before January, many would have "no choice but to start preparing their workforce for potential redundancies".
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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.
“What’s supposed to be a festive period bringing back the small business spirit has now sadly been stolen by a Grinch government, who’s under the illusion that small firms can plan on a less than three-month horizon and survive this bleak winter without any indication whatsoever whether their energy relief will continue or not.
“Small firms reluctant to turn their heat on are left shivering in the cold by this ambiguity of the Government, which feels stone-cold at this time of the year. It is also causing nightmares to owners of local pubs, independent launderettes and small knitting shops worrying that this Christmas could be their last.
“This is not the time to play around with vital support schemes that are giving businesses a fighting chance in the new year. All small firms want is the Government’s continuing energy support – one that takes business size into account and applies directly to bills – after the current scheme ends.”
John McCabe, North East England Chamber chief executive, said: "Businesses need certainty and stability now. Our members are consistently calling for clarity on energy relief and available resources as they manage the transition into the new energy landscape. The longer the government doesn’t commit, the more difficult it is for businesses to plan for the future.
"As identified in our Commercial Energy Relief Consultation Response, the BCC report that 47% of UK small and medium-sized enterprises say it will be difficult to pay their energy bills when government support ends, with a further 4% saying they will not be able to pay their energy bills at all. We will continue to work directly with our members to feed their thoughts into multiple channels, including the treasury, Department for Levelling Up, Housing and Communities and Department for Business, Energy and Industrial Strategy, and encourage government to set a clear direction of travel before the new year."
A Treasury spokesperson said: "We are protecting businesses from high energy costs this winter, caused by Putin’s invasion of Ukraine, through the six-month £18bn Energy Bill Relief Scheme. However, this is very expensive, and we need to ensure longer-term affordability and value for money for the taxpayer.
"That is why we are currently carrying out a review with the aim of reducing the public finances’ exposure to volatile international energy prices from April 2023. We will announce the outcome of this review in the New Year to ensure businesses have sufficient certainty about future support before the current scheme ends in March 2023."
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