Energy bills for Stirling businesses are to be slashed from their expected levels this winter as struggling traders fight to keep the doors open amidst the cost of living crisis.
In a raft measures unveiled by the UK government this week, businesses will be granted a discount on wholesale gas and electricity prices whose current bills have been significantly inflated due to the price hike.
Through the new Energy Bill Relief Scheme, businesses will be offered the reduction, similar to the move made last month to protect households from the sharp increase.
It will apply to fixed contracts agreed on or after April 1, 2022, as well as to deemed, variable and flexible tariffs and contracts.
It will apply to energy usage from October 1 until March 31 next year – running for initially for six months for all non-domestic energy users.
The savings will be first seen in October bills, which are typically received in November.
The Scottish Licensed Trade Association (SLTA) welcomed the move but warned that it “goes no way far enough and more needs to be done to help the struggling hospitality sector through the winter months”.
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SLTA managing director, Colin Wilkinson said: “This is news that we have been waiting for and obviously we welcome it but when you look beyond the headlines it doesn’t live up to the hype as this new scheme caps the wholesale price and pubs and bars could still be paying 200 to 300 per cent higher bills than normal.
“There are pubs and bars currently on a rate of 90p per kWh, in comparison to 15p in normal times. The Government says that the current wholesale price of gas is about 42p per unit therefore businesses should see a reduction of 21p in their unit price but this still means much higher bills than before the energy crisis.
“Nothing in the plan tackles the problems of large deposits and bonds, particularly for the SME independent sector, nor restricts the additional margins made by the energy suppliers.
“The SLTA is concerned this may not be the lifeline we were all hoping for and the announcement is not enough. More needs to be done to help the struggling hospitality sector through the winter months.”
The SLTA has previously called for business rates relief and a reduction in VAT for hospitality businesses.
Following the announcement, Prime Minister Liz Truss this week said: “I understand the huge pressure businesses, charities and public sector organisations are facing with their energy bills, which is why we are taking immediate action to support them over the winter and protect jobs and livelihoods.
“As we are doing for consumers, our new scheme will keep their energy bills down from October, providing certainty and peace of mind.
“At the same time, we are boosting Britain’s homegrown energy supply so we fix the root cause of the issues we are facing and ensure greater energy security for us all.”
Stirling MP Alyn Smith said: “Myself and my SNP colleagues have been calling for a cap on energy bills for business and I’m glad the UK government now appears to have started listening. However, it must be said these measures do not go far enough.
“I have spoken with local businesses who have seen their predicted energy bill skyrocket in recent months, with some seeing their bills go up by as much as five times what they were at the beginning of the year.
“These plans from the government are only for six months, giving business – especially small and medium sized businesses – zero legroom to plan and invest in their operations and growth. The government really needs to provide a much longer-term strategy and they need to do it now, not wait to see how bad things get down the line.
“My SNP colleagues and I will continue to call for this in the Commons, and I hope to see the UK government finally abandon this short-sighted approach to economic policy – businesses need competency in government now more than ever.”
Last month, we told how one Stirling small business owner was facing spiralling energy bills of £5,000 per month amidst fears he may be forced to close due to crippling costs.
Martin Bunga, who owns the Smooths Laundry and Ironing Service in Springkerse, said that his bills were due to rocket from around £3,000 per month.
Mr Bunga has run and operated the business since 2018 and offers laundry services, including bedding for some of the city’s hospitality venues, such as holiday lets, B&Bs and hotels.
He was left fearing that the expected price increase would have potentially spelled disaster.
