FSB warns energy costs pushing small firms to the brink

Soaring energy costs are pushing cafes, restaurants and shops across the nation to the brink, the Federation of Small Businesses (FSB) has warned.

FSB director Martin McTague has told The Independent the rising energy bills, coupled with reduced consumer spending as household bills soar, is forcing thousands of small businesses into making “impossible choices”.

“How is an independent cafe supposed to find another £20,000 a year to keep the lights on and the coffee machine going, when they are barely breaking even as it is?” Mr McTague said.

“How can a small manufacturer find another £70,000 to keep the production line going and the staff room heated? With five-figure annual energy cost increases common, too many small firms are being faced with impossible choices.”

Almost 15% of small-and-medium sized firms believe they may have to close or downsize as a direct result of the spiralling energy costs, according to a poll by the FSB.

The Government has faced calls to freeze bills or provide more support to households, which could give a much-needed boost to consumer spending.

However, ministers have said no action will be taken until a new prime minister is in place on September 5.

“We need direct and immediate support from the government,” Mr McTague told the paper.

“Extending energy support issued via the council tax system to the rates system, direct help with bills for those small firms which don’t pay business rates, and cutting VAT on energy consumption will make a real difference in this space.”