Home Small Business How the brand new vitality help scheme will work for SMEs

How the brand new vitality help scheme will work for SMEs

How the brand new vitality help scheme will work for SMEs


This text will probably be up to date as soon as the vitality announcement has been made to the Home of Commons later immediately (January 9).

Power help is anticipated to be reduce by greater than half as soon as the Power Invoice Reduction Scheme ends in March 2023.

In place of the present scheme, corporations will get a reduction on wholesale vitality costs, with extra energy-intensive industries resembling ceramics and metal entitled to a larger low cost. This scheme is anticipated to final till March 2024.  

The present scheme caps the price of fuel and electrical energy for all companies. Chancellor Jeremy Hunt advised enterprise teams final week that it’s “unsustainably costly”.

>See additionally: Hunt delays particulars of enterprise vitality help extension

Assist is anticipated to lower attributable to wholesale vitality costs falling very sharply prior to now few months. They’re now at a decrease degree than they have been earlier than Russia’s invasion of Ukraine. Nonetheless, they’re nonetheless three to 4 instances’ larger than their long-term common.

Nucleus Finance analysis from 500 SMEs confirmed that 39 per cent of companies have needed to improve their costs to remain afloat, whereas 25 per cent have paused funding on innovation and progress to prioritise excessive each day operating prices of the enterprise. Nearly 1 / 4 (22 per cent) anticipate a lower of their turnover by the tip of 2023.

One other survey by Merely Enterprise discovered that, out of 1,000 small companies, 54 per cent stated that rising vitality prices posed the best risk to their survival. What’s extra, three in 5 respondents suppose that the economic system is anticipated to worsen within the subsequent six months.

Analysing the report, Jonathan Portes, professor of economics and public coverage at King’s Faculty London, stated:“What can the Authorities do to assist? Gas and vitality costs are by far the biggest concern, and right here the important thing drivers are world. Nonetheless, UK circumstances have been aggravated by each Brexit and the latest fall within the pound, which additional pushes up vitality costs, in addition to by the operation of the vitality market and the value cap. 

“Nor does the disconnect between the Prime Minister’s name for a ‘excessive wage, excessive productiveness’ economic system and the insistence that staff have to just accept massive cuts in actual wages assist to enhance client and enterprise confidence. Whereas UK companies stay resilient within the face of additional financial turmoil, they want and deserve a extra coherent longer-term technique for the UK economic system.”

Learn extra

Power Invoice Reduction Scheme – the way it works



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