The government is set to reduce the level of financial energy support it provides to small businesses from April until March 2024.
The new scheme, announced yesterday, will include discounts on wholesale prices in a bid to support firms with an electricity bill subsidy of 1.96p per kilowatt hour, for business customers paying over a minimum rate.
As a result, high energy-using sectors, such as glass, ceramics and steelmakers will get a larger discount. ACS chief executive, James Lowman, described the move as “inadequate, poorly targeted and ultimately pointless,” especially as local shops face another large hike in energy costs in April.
“The new package of business support is woefully inadequate,” he said. “By moving to a subsidy on energy bills and failing to target specific sectors or those worst affected, the government has spread £5.5bn support over every type of business, the result being a level of subsidy that is ultimately pointless.
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“Make no mistake, local shops will go out of business if the government does not rethink its approach before April.”
He added: “It is not too late for the chancellor to reconsider the support he is offering, to find practical ways of targeting it more effectively, and to save the businesses who he is effectively cosigning to closure with his decision.”
Retailers have given mixed reactions to the new proposed scheme.
Vince Malone, owner of Tenby Stores and Post Office in Wales, said: “I’m disappointed with the level of support for many businesses.”
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He added that he will now be forced to “look at ways to cut back”, specifically in his Post Office branch, in a bid to minimise the costs he offloads to consumers.
Guarave Sood, owner of Neelam Post Office & Convenience in Uxbridge, commended the government’s latest move.
He said: “I think what the Chancellor has done is good because a lot of people would expect them not to continue to help, so I would commend them [trying] to help both the public and businesses.”
Jason Birks, the Fed’s national president, said: “This is hugely disappointing for many independent retailers who are struggling to survive. With rising energy bills, falling margins, and rising payroll costs, small businesses will continue to struggle or, indeed, cease to exist unless additional financial support is available.”
Costs are capped at present in the current scheme under chancellor Jeremy Hunt.
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