‘It doesn’t cut it’ Small businesses seek clarity on energy bill cap
OWNERS of small businesses have voiced their concern and confusion after the Government announced its plan for an energy bill cap amid the ongoing cost-of-living crisis.
The wholesale cost of gas and electricity would be slashed for companies under a scheme that would run for six months starting in October, Business Secretary Jacob Rees-mogg said, but some businesses have suggested VAT cuts as a better solution.
The founder of online retail gift company Betsy Benn, based in Cheltenham, said she was “suspicious” about the six-month plan when the equivalent cap on household energy bills was set to last two years.
Betsy Benn, 47, told the PA news agency: “Purely from a planning point of view, it is really disappointing. If the domestic cap is for two years, they are expecting rates to be unstable for two years – so why are they only making a plan for businesses for six months?
“Six months just doesn’t cut it for any kind of planning solution.
“There’s really not much information around it, it just seems to be a headline announcement again.
“I feel like (there) is pressure from the energy companies and I wonder if there is more for them to gain by not having a cap? I feel suspicious about it.”
Ms Benn is worried about her business’s use of electricity to make personalised gifts and already had plans to bring forward the company’s production of Christmas-themed items to avoid the expected price rise in October.
“We are just maintaining the frugal approach. We’re putting as much effort into getting Christmas production done now and just compulsively going around the studio switching off lights, switching off radiators,” she said.
“(But) if there’s no protection for small businesses after the initial six months, it’s concerning.
“It’s great that there is a cap for our peak trading period, but we are heading into a deep recession.
“I am confused and looking for more clarity.”
Paul Cook, director at The Angry Parrot micropub in Cheltenham, is also concerned about what lies beyond the next six months.
“This support’s only for six months, and I don’t mean to sound ungrateful, but what’s going to happen after those six months? Will it be enough to turn it all around? We need to make sure the public has disposable income,” Mr Cook, 50, told PA.
“Trade for us has already dropped off, probably by about 40% in the past month. We’re looking towards the Christmas period and hoping this could help to kick-start things, but I don’t know.”
Mr Cook said that while “relief is welcome”, the future of his business relied on the spending power of the general public.
“It’s all well and good reducing the energy cap ... but if the general public aren’t in the pubs, clubs and hospitality venues across England, then it makes no difference,” he said.
“People are trying to save money where they can. Covid obviously changed people’s behaviour. It’s all a bit of a cumulative effect, really, and this is sort of the peak of it, I think.”
Mr Cook added: “VAT is always a killer. If we could reduce that, that would be more than welcome. It’s all about cash flow for us.
“Any scrapping of business rates for the remainder of the year, that would be more than welcome.”
We’re looking towards the Christmas period and hoping this could help to kick-start things, but I don’t know
Paul Cook