Energy Support Changes And The Impact On Small Business
One of the leading areas of concern for both consumers and businesses right now is the cost-of-living crisis, with a particular focus on energy costs.
We’ve seen significant cost increases for both domestic and non-domestic entities and today’s article is going to focus on the changes to government energy support packages for non-domestic customers. Furthermore, we’ll find out how small businesses including fashion, retail and clothing photography in London, as well as across the UK have reacted to the news and what it may mean for their organisation.
The treasury announces a new support programme for non-domestic customers
With the raft of economic support packages set up by the government last year changing, this means a new energy bill support programme is going to be implemented for non-domestic customers that extend beyond April 2023. The headline feature of this new support programme is that it will be less valuable than the previous version, but it does at least provide support.
So let’s find out some more details.
Who is eligible and what should they receive?
Ultimately, all of the organisations that were eligible for the current support programme will automatically switch to the new support from April 2023. This includes standard businesses, those operating in the public sector and the voluntary sector.
The figures announced suggest that this new plan will reduce bills by up to:
- £6.97 per MWh for gas that is used
- £19.61 per MWh for electricity that is used
It is important to note that this discount is only triggered when the prices for both gas and electricity reach a certain level. This means electricity prices must reach £302 per MWh and gas prices must reach £107 per MWh.
Why has the change been made?
The main reason for such a change is that the government didn’t wish to continue spending such a significant amount per quarter to help organisations. A comment by the Chancellor called the current plan “unsustainably expensive”.
Whilst it will be far cheaper than the estimated £18 billion spent in the past 6 months, it will still cost the government an estimated £5.5 billion over 12 months from April.
What do small businesses think about these changes?
Industry bodies have shown a degree of understanding about these changes and how the current plan was simply unaffordable in the long run. However, individual businesses and other bodies have reacted with concern from all areas of industry including fashion and clothing photography.
A comment from Small Business Britain explained their concern that instead of life becoming more manageable, it would appear challenges will increase. Energy consultants believe some parts of the retail sector, as well as hospitality, will be most vulnerable to the changes in energy support.
As a business that operates within the clothing photography London niche, supporting fashion and retail clients we hope that businesses are able to find a route through these difficult times until energy prices reduce and bills become more manageable.