SaveMoneyCutCarbon, the UK’s leading corporate sustainability advisory firm, has called for the introduction of an energy price cap, mirroring the principle that is available for individual consumers. This autumn, many businesses throughout the UK are facing a cost-of-operations crisis as the majority of UK companies are set to renegotiate their electricity and gas rates in the coming months.
As households throughout the UK face a huge energy bill increase of 80% as the price cap jumps from £1,971 to £3,549, businesses are not protected meaning there’s no limit on how much they can pay in energy. According to energy brokers, many companies have expiring contracts this year, with estimates from Cornwall insight estimating those looking for a new contract will be forced to pay more than four times what they paid in 2020 on energy bills.
The Federation of Small Businesses (FSB) is calling on the government to include businesses in the energy price cap. SaveMoneyCutCarbon believe that the “bill-shock” experienced by consumers, is now set to be felt by businesses across the UK.
For context, the Federation of Small Businesses estimated that a typical company in London with 30kWh annual consumption would see the cost of its annual electricity bill to raise from £4,700 to a whopping £21,200, with their gas bill jumping from £1,350 to £7,050.
According to the latest official data, about 1,800 companies throughout England and Wales have registered for insolvency in July, forcing many to have to close their doors as their bills increase to the point where they can no longer function.
Across the board, the energy crisis is already eating into a majority of businesses’ profit margins, with SMEs across the country facing an average bill increase of over 250% in the last year alone, according to Cornwall Insight.
In addition, a report by the Federation of Small Business found that 53% of small businesses will stagnate, decline or fold in the next 12 months. This is even more concerning when you consider that 53% of SMEs in the UK are not doing anything to monitor their energy efficiency, and are likely spending far more than they may need to on energy costs. Britain’s leading sustainability experts, explain that shopping around and switching tariffs to reduce energy bills has become obsolete.
