Small businesses voice their concerns about soaring energy prices

ended 05. January 2022

We asked small businesses about how they will be impacted by significant energy price hikes this year. Their responses are below.

8 responses from the Newspage community

Star Quote
"With the increases in energy prices and also the increase of NI contributions in April, small businesses are going to be hit especially hard in more than one way. Reviews will need to take place to see where cost savings can be made and the biggest cost, sadly, is people. Equally, employees may have to re-evaluate their own income and small businesses could see an increase in staff turnover, which creates additional financial pressure as the average cost to replace an employee is 50% of their salary for the first year. Support needs to be looked at for those businesses affected and now, not once the increases have happened."
Star Quote
"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."
Star Quote
"In general I feel that businesses are seen as a blank cheque book with endless cashflow so it really wouldn't surprise me if businesses are given a different price cap to residential and rates spiral out of control. The squeeze on SMEs is already frightening with many of us putting a stop to investments because a majority of suppliers are sending weekly price increase emails. This could well be the straw that breaks the backs of a number of small businesses."
Star Quote
"I am genuinely terrified about rising energy bills. My provider went bust recently and we were moved to Shell and they have just ‘suggested’ we increase our monthly direct debit by £90 a month. I’m a wholesale baker working from home with several ovens on the go. I'm not sure how long will I be able to keep going on swallowing the increases."
"The spectre of inflation is haunting the UK and Europe, and is set to worsen. With wholesale energy prices having risen more than 500% recently, which hasn't yet filtered through to consumers and businesses, we're now on the cusp of seeing the actual impacts of COVID and Brexit. Businesses will have to increase prices which will only add to the scourge of inflation, and that coupled with the ludicrous base rate rise last month is baking in severe economic pain for us all. The energy cap isn't a realistic way to proceed as it will force more utility companies out of business. We need to develop our own sustainable energy rather than leave it to market forces, which is the raison d'etre of the Tory party and its daft economic ideology."
"Mortgage affordability will be affected, as lenders will need to factor in much higher energy prices. Combined with higher inflation generally and rising interest rates, we expect mortgage deals to be more difficult to secure in 2022 than 2021."
"Oil prices have been steadily increasing since May 2020 and the cost of energy has followed suit. However the price of gas and electricity has rocketed in recent months. Increased demand from China and low stored supplies are two drivers, along with the fact that more than 25 energy suppliers have gone bust in recent months. This pushes consumers onto higher tariffs with new suppliers. These higher costs are doubly felt by the public not only in higher household fuel bills but by businesses in higher running costs, contributing to inflation, and putting more strain on the end consumer."
"Huge energy rises will have a dramatic impact on the mortgage market. As advisors, we need to ensure that mortgages are affordable for all clients, so rises in monthly expenditure will affect how much clients can borrow. As a result, it could lead to people being able to borrow less than before."