Sunday, March 3, 2024

Survey finds half of SMEs won’t be able to pay energy bills next spring

A new British Chambers of Commerce survey has found almost half of SMEs say they will find it difficult to pay their energy bills once the Government’s Energy Bill Relief Scheme ends next March.

A further 4% say they will not be able to pay their energy bills at all, while 37% predict they will find it difficult to pay even when they are in receipt of Government support.

Over four in ten (41%) SMEs disagreed that tariffs available the last time they renewed their contract were affordable. A further 29% said a range of tariff options was not available, while almost a quarter (24%) did not feel it was easy to change providers.

A quarter of SMEs surveyed had renewed their electricity tariff since April 2022, while 22% had renewed their gas.

These firms were more likely to struggle to pay their energy bills going forward with 60% saying they will face difficulties paying after March 2023, and 7% saying they won’t be able to pay at all. Over half (51%) will find it difficult to pay their bills between now and the end of March, during the period of the Government’s Energy Bill Relief Scheme.

SMEs who had renewed their tariffs since April 2022 also faced greater difficulties during the renewal process; 69% disagreed that the tariffs available to them were affordable, while almost half (47%) disagreed that there was a range of tariff options available.

Shevaun Haviland, Director General of the BCC, said: Energy costs are the number one business concern, with 55% of firms saying it should be a top priority for the new Prime Minister.

It’s clearly worrying that almost half of SMEs say they will face difficulties paying their energy bills once the Government support runs out. But what is, perhaps, even more concerning is that 4% said that they will not be able to pay their bills at all after March 31.

“With over 5.5 million SMEs across the UK, if this was replicated on a national level, over 220,000 small and medium-sized businesses would be in danger.

While current Government support is welcome, there is a cliff-edge looming, and firms will struggle to see beyond it. They need certainty on what will happen in April so they can plan with increased confidence.

Government should not forget those businesses that will not benefit from a new energy package but will continue to require support once the current scheme ends. There are other levers that Government can pull to relieve cost pressures, such as a reform of Business Rates to compensate firms that see energy support reduced or phased out.

There is also a lack of competitiveness in the business energy market. Firms are struggling to get quotes from different providers, and they are not guaranteed access to fixed-rate contracts.

“Ofgem should be given more power to strengthen regulation of the energy market for businesses, ensuring suppliers offer fixed-rate contracts to business customers, and that competitiveness is increased.


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