Federation of Small Businesses analysis shows risks in government cuts to energy support

Orkney and Shetland MP, Alistair Carmichael, has today responded to new analysis by the Federation of Small Businesses of the government’s planned changes to non-domestic energy support. Findings from the FSB suggest that the average small business would access just £47 in a year under the new scheme, which comes into effect from 1 April, while two thirds of firms “could at very most theoretically access £200.”

Craig Beaumont, the FSB’s chief of external affairs, said the new policy was “rubbing insult into the wound”. The FSB said one in four small firms will struggle to survive if they are hit with a large increase in energy costs, while noting that small businesses employ 16 million people in the UK economy.

Mr Carmichael said:

“The analysis from the FSB today should put the government on notice. Small businesses are at the heart of our economy here in the isles – we have to ensure that energy support is fit for purpose if prices remain high.

“A minister yesterday suggested that cuts were needed to prevent ‘failing or unproductive firms’ benefiting from support. At best that is a generous interpretation of how much anyone will benefit from this reduced support. At worst it is a troubling reversal of the understanding that ministers had during the pandemic that it would be a disaster to allow viable businesses to go to the wall through no fault of their own.

“Short term thinking has been the hallmark of this government. They need to look beyond the end of their noses and make sure that economic harm does not get any worse.”