Over half of customer-facing businesses will have to raise prices without government energy support
Over half (51%) of customer-facing business such as hairdressers, gyms and restaurants will have to raise their prices without further support from the Energy Bill Relief Scheme (EBRS), due to end in March[1]
More than a third (40%) will need to take more drastic action such as cutting staff, restructuring or closing altogether without additional support[1]
Despite this, less than half (44%) understand how the EBRS affects the price of energy businesses pay[3]
Experts at Uswitch for Business advise business owners to check they understand the terms of their contract before signing any new deal - and to avoid overpaying by falling out of contract
Over half (51%) of businesses with customer-facing premises such as shops, hairdressers, nurseries, cinemas and gyms will be forced to raise prices if the Energy Bill Relief Scheme (EBRS) scheme is not extended, risking even higher rates of inflation and a further squeeze on consumer’s wallets.
The new research comes from comparison service Uswitch for Business ahead of news that details of the new scheme will be announced in the House of Commons today.
Uswitch for Business is advising firms to check they understand the terms of any new energy deal before signing and aren’t falling out of contract - which could lead to overpaying by as much as 50%, according to Uswitch market insight.
The Energy Bill Relief Scheme (EBRS) is a government scheme that offers businesses a discount on their gas and electricity costs, introduced for an initial period of six months from 1 October 2022 to 31 March 2023. The revised scheme is expected to offer help with bills for a further year, until March 2024.
Eligible businesses don’t need to apply for the discounts but should check if they believe it has been applied incorrectly by their supplier. It’s important to note the level of discount on bills will vary depending on contract, tariff and date it was agreed.
Last week, the Chancellor explained that any future support post March, while at a lower level and cost, would be designed to help them transition to the new higher price environment and avoid a cliff edge in support. The new scheme is expected to cost £5bn, compared to £18bn previously.
One in five (20%) public-facing businesses such as hotels, beauty salons and gyms, say they will need to take equally drastic action such as closing some operations, downsizing or restructuring the business, and more than one in seven (13%) said they will have no option other than to reduce overall staffing [1].
Indicating that UK business is set for a deep freeze, over seven in 10 (71%) of business decision makers agree that the cost of energy means they will have to postpone making hiring decisions[4]. while one in eight (12%) also said they will miss payments to their suppliers without ongoing support.[1].
Over four fifths of customer-facing businesses (81%) have heard of the Energy Bill Relief Scheme[2]. Despite this, just 38% know that the scheme is due to end in March 2023[4] and less than half (44%) say that they understand how it affects the price of the energy that businesses pay[3].
The research is a stark reminder of the soaring cost of gas and electricity – cited by more than one in two (55%) business leaders as their biggest concern.[6]
Jack Arthur, business energy expert at Uswitch for Business, comments: “The new reduced business energy support will likely be a blow to millions of struggling businesses.
“This decision, originally expected in December, is likely to most impact many smaller businesses that are much relied on by the public and are unable to shield themselves from further cost pressures.
“It’s important to note that the current level of Government support is tied to the type of energy contract that the business has secured and the date it was agreed.
“To ensure all businesses are on the right tariff for their commercial needs, it’s important to consider how they buy and use gas and electricity.
“Any business looking for a new deal must ensure they understand the terms of their contract before signing. They should also be reminded to check their contract end date as failing to secure a new agreement can add eye-watering costs to a business' energy bill.”
-ENDS-
Notes to editors:
Unless otherwise stated, all figures taken from omnibus research carried out by Opinium on behalf of Uswitch for Business. This was an online poll of 250 senior decision makers in UK SMEs with a public facing premises. A nationally representative sample. The research was conducted between 8th to 13th December 2022.
Respondents were asked ‘If, as planned, the Energy Bill Relief Scheme is not extended at the end of March, how, if at all, will this impact your business?’, 51% said ‘we will need to increase our prices’, 20% said ‘we will have to close some operations / downsize or restructure the business’, 13% said ‘we will have to make staff redundant or reduce overall staffing’, 12% said ‘we will not be able to pay suppliers on time’, 7% said ‘we won’t be able to stay in business’
Respondents were asked ‘Have you heard of the Energy Bill Relief Scheme (EBRS)?’, 81% said ‘Yes’, 18% said ‘No’
Respondents were asked ‘Have you heard of the Energy Bill Relief Scheme (EBRS)?, 44% said ‘Yes, I have heard of this and understand how it affects the price of energy that businesses pay’
Respondents were asked ‘To your knowledge, when is the Energy Bill Relief Scheme (EBRS) currently scheduled to end?’, 38% said ‘March 2023’
Respondents were asked ‘How far do you agree or disagree with the following statement: “The cost of energy means we will have to postpone making hiring decisions”’, 71% said ‘Agree’, 9% said ‘Disagree’
Respondents were asked ‘What are your top three biggest concerns for your business in 2023?’ 55% said ‘Energy bills’, 27% said ‘Product inflation’, 26% said ‘Rent costs’ Respondents were asked ‘What support, if any, would you like to see from the Government to help businesses with their energy costs?’ 44% said ‘An extension to the Energy Bill Relief Scheme (EBRS)’, 2% said ‘I don’t think there should be any support’
About Uswitch
Uswitch is one of the UK’s top comparison websites for home services switching, including broadband, mobiles, SIM Only and insurance. We’ve saved consumers over £2.5 billion off their bills since we launched in September 2000.
In 2022, Uswitch launched its free mobile app, Utrack, to help consumers manage their home energy costs. By connecting to their smart meter, users can track their energy usage hourly, get dynamic insights and calculate potential savings with handy tips.
Uswitch is part of RVU, a global group of online brands with a mission to empower consumers to make more confident home services, insurance and financial decisions.