Small businesses in the UK are grappling with significant increases in fixed daily utility costs, which are escalating regardless of usage. Recent data shows that nearly two-thirds of these businesses cite utility costs as a key factor driving higher expenses.
The Federation of Small Businesses (FSB) reports that one small firm saw its daily standing charge soar from 70.94p in July 2021 to 969.64p by September 2023, an increase of 1,266.9%, costing over £3,500 annually. The customer was reportedly unaware of this dramatic rise.
Particularly affected are rural small businesses, highlighting a growing rural-urban divide and hindering efforts to support remote UK areas. Standing charges cover network infrastructure and policy initiatives like the Warm Home Discount, though their complexity often confounds small business owners.
Unlike domestic consumers, these businesses aren't protected by an energy price cap, leading many to believe their costs are being unjustly inflated.
The FSB said:
"SMEs can choose to limit their energy consumption to ensure that they do not pay higher consumption-related bills, but an increase in the standing charge places an inescapable financial burden on businesses merely for being connected to the grid.
"Standing charges in turn become a regressive form of billing on small businesses which dampens their growth, confidence, and ability to invest.
"This is highly pertinent to small businesses, the majority of whom are keen to play their part in reducing carbon emissions, and underlines the need for greater transparency around what standing charges are actually used to fund"
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