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It might be Spring but business energy price rises will make it feel like Winter

It might be Spring but business energy price rises will make it feel like Winter

One of the hardest parts of moving through different eras is recognising when things have changed.  Sometimes it’s only after an event that you recognise that things are different and not going to be the same again.  For businesses, this month might be one of those occasions when it’s impossible to ignore that when it […]

One of the hardest parts of moving through different eras is recognising when things have changed. 

Sometimes it’s only after an event that you recognise that things are different and not going to be the same again. 

For businesses, this month might be one of those occasions when it’s impossible to ignore that when it comes to energy prices - we’re in a new and probably unwelcome situation. 

Millions of companies across the UK will see their annual energy bills rise by hundreds or possibly thousands of pounds a year with some SMEs looking at an increase of as much as five times their average bill (250%).

Unlike domestic energy customers that have a price cap that will hold the price rise to just under £2,000 and receive a repayable rebate from the government, there is no such protection for companies, some of whom will be in energy intensive activities such as hospitality, retail or manufacturing. 

In March, natural gas prices peaked at £8 per therm. This time last year the price was 42p per therm and has averaged at £2.88 per therm during the previous 12 months. 

Mark Bennett of energyhelpline.com said: “Last year’s wholesale energy price crisis saw wholesale energy costs increase by nearly ten times by December.

“This caught many in the energy industry unawares which ultimately saw 29 UK suppliers either go into administration or ultimately liquidation.”


The energy price rises will also affect businesses beyond seeing their own bills increasing. 

Their employees and customers will see their bills rise exponentially and will have to deal with the personal implications of dealing with a large drop in disposable income.  

This means there will be less discretionary spending available from potential customers, which could mean more businesses fighting over a smaller pool of income. 

At the same time, many will be facing immediate wage pressures from staff struggling to heat and light their own homes. 

Some businesses will be juggling increased transportation costs due to high petrol prices and bills rising through 30-year high inflation. 

Additionally, companies will see higher business rates and economy-wide labour and ongoing supply shortages due to import delays and unpredictable global events. They will also be facing higher taxes and increased National Insurance Contributions. 

Craig Beaumont, head of external affairs at The Federation of Small Businesses, said: “The picture we’re seeing is that all these unplanned bill increases are hitting our members who are already facing major headwinds including supply chain disruption, high inflation, late payments from large businesses customers and a large tax increase on small businesses coming in April.”

Many are also struggling to make bounce back loan repayments and service outstanding VAT arrears too. 

Lucinda O’Reilly, director of The International Trade Consultancy, said: “The rate at which energy prices are rising is going to have a disastrous impact on British manufacturers who already pay much higher prices than competitors in Europe and the rest of the world.”

Martin McTague, the Federation of Small Business’ National Vice Chair, said: “The Government and Ofgem need to understand that microbusinesses face many of the same challenges as consumers when it comes to negotiating energy deals but without the same protections.

“While big corporations can use their sizable purchasing power and large headcounts to secure favourable terms. Small business owners don’t enjoy that luxury.

“As things stand, you have the smallest businesses being hit by surging fees but with no price cap, no protection of credit balances and no support from the Redress Fund for households impacted by supplier failure to fall back on.”

“That’s on top of all the other pressures facing firms, not least continuing consumer Covid anxiety, widespread isolation of staff and spiralling inflation in the round.”


Chris Horner, Insolvency Director with BusinessRescueExpert said: “Many businesses will find themselves in the worst position they could possibly be in.

“Their fixed deals will be coming to an end and the marketplace itself is shrinking meaning that replacements are just not available. 

“Some of the more attuned businesses will be looking at alternative strategies to reduce costs including a mix of reducing investment and recruitment while at the same time looking at increasing their own energy resilience. 

“Investing in solar panels, heat pumps or even wind power if their premises and situation allows for example.

“But before considering more drastic solutions, they should use any available time right now to get some professional advice and then take action so that when price or other unforeseen shocks arrive they will be resilient enough to withstand them.”

The forthcoming energy bill rise is just one of an unpleasant range of threats facing every business in short order this year. 

Any one of which could prove terminal on its own but taken as a collective could form an insurmountable looking wave of worries. 

This is where we can help. 

Book your free, virtual consultation with one of our experienced expert advisors for a time and date that’s most convenient for you.

Together we’ll explore all the options that are available to you both immediately and in the longer term and what you can do to achieve your aims - if it’s possible.

We’ll be clear, up front and straight with you about what you can do now and next and can help you to implement changes if they’re needed.

The first and easiest decision is still yours - and that’s to get in touch with us today.

Business Rescue Expert is part of Robson Scott Associates Limited, a limited company registered in England and Wales No. 05331812, a leading independent insolvency practice, specialising in business rescue advice. The company holds professional indemnity insurance and complies with the EU Services Directive. Christopher Horner (IP no 16150) is licenced by the Insolvency Practitioners Association

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