The British Chambers of Commerce (BCC) has said businesses are facing an 85% reduction in energy support from April.

The BCC is underscoring the pressing necessity for an energy support contingency plan and urging for a collaborative and targeted initiative to aid companies struggling with this matter.

With the deadline for the reduction rapidly approaching, the situation has escalated to a critical level and prompt action has become indispensable, the BCC has said.

Alex Veitch, Director of Policy and Public Affairs at the BCC, said: “We have been signalling for months that many businesses will struggle to afford their energy bills when financial assistance reduces by 85%, with many receiving a fraction of their original support. 

“Almost half (47%) of firms say paying bills will be difficult from tomorrow onwards.”

Mr Veitch emphasised that to ensure competition in the business energy sector and address market failures, the government must grant Ofgem the necessary powers to regulate the industry effectively.

Federation of Small Businesses Policy Chair, Tina McKenzie, has warned of an existential risk for tens of thousands of small businesses as the Energy Bill Relief Scheme ends and fixed energy contracts revert back to high prices, which could force 370,000 small firms to downsize, close or restructure.

Ms McKenzie has called for a “blend and extend” option to renegotiate energy contracts and avoid unnecessary inflation.

A government spokesperson told ELN: “Companies large and small will benefit from the baseline discount through our new energy bills scheme and do not need to apply for it and a higher level of support will be provided to the most energy and trade intensive businesses of all sizes.

“While no national government can control the global factors pushing up the price of energy and other business costs, we continue to stand by businesses.

“That’s why we provided them and other non-domestic energy users with an unprecedented package of support enabling some businesses to pay around half of the predicted wholesale energy costs this winter.”

ELN has approached the Treasury for comment.

Article source: https://www.energylivenews.com/2023/03/31/businesses-on-the-verge-of-experiencing-an-85-decrease-in-energy-support/