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Wholesale energy prices are falling, which must be welcomed, but this cannot be used as a reason to justify reducing support for businesses’ energy bills. Despite the falls in wholesale energy prices, many businesses - there are thousands of them in Scotland alone - are still stuck on contracts based on prices which were fixed during last year’s energy price peak.

If businesses are to survive, the energy support from the UK Government will continue to be vital. The UK Government must also work with energy suppliers to ensure that they offer more flexible contracts so that businesses benefit from falling prices, rather than being trapped in more expensive long-term fixed contracts.

In the beleaguered hospitality sector the situation continues to be critical, with almost half of those who signed an energy contract at the peak of the energy crisis fearing that their business is at risk of failure. Pubs, bars and restaurants saw their energy prices surge by 81% in the year to May 2023, on top of the soaring cost of food and wages rising.

Attempts to absorb those costs has bred unsustainable business practices, leading to businesses collapsing.

It is vital for small businesses that the UK Government fully recognises the scale of the challenges. It must work with Ofgem in the wake of its review of the energy market and take on board its range of recommendations for changes to regulation, to increase transparency and rebalance the power between the energy supplier and small businesses.


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