Almost half of SMEs facing April cliff edge on energy bills

A new British Chambers of Commerce (BCC) survey also revealed that 37 per cent of SMEs predict they will find it difficult to pay even when they are in receipt of government support and over four in 10 (41 per cent) disagreed that tariffs available the last time they renewed their contract were affordable. 

A further 29 per cent said a range of tariff options was not available, while almost a quarter (24 per cent) did not feel it was easy to change providers.

The new report continued that a quarter of SMEs surveyed had renewed their electricity tariff since April 2022, while 22 per cent had renewed their gas and SMEs that renewed their energy tariffs after April 2022 reported more difficulties.

These firms were more likely to struggle to pay their energy bills going forward with 60 per cent saying they will face difficulties paying after March 2023 and 7 per cent saying they won’t be able to pay at all. 

Over half (51 per cent) 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 that had renewed their tariffs since April 2022 also faced greater difficulties during the renewal process; 69 per cent disagreed that the tariffs available to them were affordable, while almost half (47 per cent) 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 per cent 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 per cent said that they will not be able to pay their bills at all after 31 March,” she said.

“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.”