‘It doesn’t cut it’: Small businesses seek clarity on energy bill cap

Vicky's bakery is one of many small businesses impacted by the government's latest plans

Small business owners across the South West say they have been left conceredn and confused after the Government announced its plan for an energy bill cap.

The plans will see the wholesale cost of gas and electricity slashed for companies under a scheme which will run for six months starting in October.

Business Secretary and North East Somerset MP Jacob Rees-Mogg said some businesses have suggested VAT cuts as a better solution.

Founder of online retail gift company Betsy Benn, which is based in Cheltenham.

Betsy Benn, 47, said she is “suspicious” about the six-month plan when the equivalent cap on household energy bills is set to last two years.

She said: “Purely from a planning point of view, it is really disappointing. If the domestic cap is for two years, they are expecting rates to be unstable for two years, so why are they only making a plan for businesses for six months?

Besty Benn says she is "suspicious" about the six-month plan when the equivalent cap on household energy bills is set to last two years.

“Six months just doesn’t cut it for any kind of planning solution. There’s really not much information around it, it just seems to be a headline announcement again.

“I feel like there is pressure from the energy companies and I wonder if there is more for them to gain by not having a cap? I feel suspicious about it.”

In Cornwall, baker Vicky was facing an electricity price hike from around £3,000 to around £13,000 a month over winter.

The government's announcement means that won't happen, with the price cap working out as an estimated £10,000-a-month saving over six months for te bakery.

However, staff at the firm feel it is a temporary fix for a broken system.

Hairy Harford, co-owner of Vicky's Bread, said they were all "worried sick" about rising bills.

"If you've got to put 40p on a loaf of bread or every pasty, or everything that goes to the consumer, and that affects inflation, the whole cycle, is this is a stop-gap? But it's much much more important now to come up with a solution very, very quickly to solve the problem."

'What’s going to happen after those six months?'

Paul Cook, director at The Angry Parrot micropub in Cheltenham, is also concerned about what lies beyond the next six months.

“This support’s only for six months, and I don’t mean to sound ungrateful, but what’s going to happen after those six months? Will it be enough to turn it all around? We need to make sure the public has disposable income,” Mr Cook, 50, said.

Jo Hobbs with Paul Cook, director at the Angry Parrot micropub in Cheltenham, who is concerned about what lies beyond the next six months

“Trade for us has already dropped off probably by about 40% in the past month. We’re looking towards the Christmas period and hoping this could help to kickstart things, but I don’t know.”

Mr Cook said that while “relief is welcome,” the future of his business relies on the spending power of the general public.

“It’s all well and good reducing the energy cap … but if the general public aren’t in the pubs, clubs and hospitality venues across England, then it makes no difference,” he said.

“People are trying to save money where they can. Covid obviously changed people’s behaviour, it’s all a bit of a cumulative effect really, and this is sort of the peak of it, I think.”

Mr Cook added: “VAT is always a killer, if we could reduce that that would be more than welcome. It’s all about cash flow for us.

“Any scrapping of business rates for the remainder of the year, that would be more than welcome.”