Small‑and‑Medium Businesses Brace for a Wind‑Down in Energy Relief
When the government hinted that it will slash the energy‑relief budget once the current scheme expires in March, firms with 10‑100 employees felt the chill of uncertainty. According to a 150‑company poll by Allica Bank, 69 % of owners think the current plan won’t stick around long enough to make a real dent.
Why the Cut Will Hit Hard
- Over a third of the UK’s business turnover and jobs come from SMEs.
- Almost one in ten survey respondents called the relief a lifeline during the pandemic.
- Two‑thirds described the subsidy as “a valuable resource” to weather an uncertain economy.
Energy bills are just one tightener; the survey shows that 93 % of businesses flagged rising interest rates as a major threat. The Bank of England is expected to keep nudging the Base Rate higher over the coming months.
Other Cost Pressures
- Inflation, supply‑chain snags, and labour shortages are all roaming the scene.
- Construction raw materials jumped 22 % last year, and a 51 % of builders feel the squeeze.
- Nearly 43 % of business owners say the supply‑chain crisis is their top headache.
Allica’s Take
Conrad Ford, Allica’s Chief Product and Strategy Officer, acknowledges the government faces a tough balancing act between business support and affordable public spending.
“The energy‑relief package was a quick response that made a real difference for businesses across the country,” Ford says.
“Now that it’s set to be reduced, many are worried about how it will shape 2023, especially those hoping to steer back into growth after the pandemic.”
“We see a real demand for banks to step up. A staggering 83 % of surveyed firms want more lifelines—whether through funding, guidance, or plain old expert advice. Specialist banks with strong relationship focus are uniquely positioned to deliver.”
What Happens Next?
Businesses will likely scramble for alternative funding, lean on colleague networks, and develop new cost‑management strategies. Meanwhile, the market will watch closely to see if reduced energy relief triggers a shift in spending patterns or a rally in creative business solutions.
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