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Under the ‘Micro’Scope: North East’s Smallest Businesses Neglected by Government at a Time of Crisis


Oct 6, 2023
Micro Business Owner
  • Many microbusiness owners feel overlooked when it comes to the right support from the UK government.
  • Small business leaders say they remain concerned about high energy costs.
  • Only four per cent of those surveyed said they were happy with the government support in place to help with energy bills this winter.

With 5.2 million microbusinesses in the UK, having a combined turnover of £808 billion*, the sector is a major contributor to the nation’s economy. But a new survey by Valda Energy reveals that many business owners in North East feel overlooked and misunderstood when it comes to the right support from the UK government.

With the approach of winter, microbusiness owners (those with less than ten employees) say they remain concerned about high energy costs and call for more tailored help, such as a regular winter support scheme, for companies that need it most.

Steve James, CEO of Valda Energy, a specialist energy supplier to small businesses, comments: “Only four per cent of the business owners we surveyed said they were happy with the government support in place to help with energy bills. And alarmingly, nearly one in five, facing rising costs, high energy prices and the impact of the cost-of-living crisis, said they feared closure over the next six to twelve months.”

According to the survey, 62 per cent of owners in North East do not feel the government understands their needs; with 16 saying they have been neglected in favour of hand-outs to consumers and larger businesses.

52 per cent believe the government’s Energy Bill Relief Scheme (EBRS) did not offer sufficient help over the winter months, with many believing the scheme was simply not in place for long enough. Just 10 of businesses said the less generous Energy Bill Discount Scheme (EBDS) that followed is providing adequate support.

Valda Energy’s research highlights concerns amongst small businesses across the region, with 57 per cent calling for the introduction of a regular winter support package this year and 47 per cent asking for tailored support for businesses that need it most. Others are demanding more green energy subsidies, free carbon audits and additional help to improve energy efficiency.

And because of additional worries relating to higher inflation and interest rates, supply chain availability, difficulties over recruiting skilled staff and industry legislation, the survey reveals that microbusinesses are struggling to plan ahead. 67 per cent of respondents in the region said they no longer carried out regular financial forecasts and, of those that did, only 14 per cent were looking as far ahead as 12 months.

Mr James is urging industry, government and Ofgem to come together to design a tailored funded support package for those businesses most in need, including those that signed at a time of very high prices in 2022. He says: “Small businesses are vital to the success of the regional economy, but their collective voice is not being heard. I believe the government has a duty to act now, before demand increases over the winter months, communicating to owners what support will be available this winter and providing more levelled and sustained protection for companies over the medium to long term.”

And he argued that providing the right help might not cost the government any more money than it has already pledged. He says: “One obvious helpline would be to see the underspend on the EBRS scheme – now expected to be in the region of £11bn – go towards helping businesses in high-rate fixed term contracts. Certainly, it’s an idea that 86 per cent of the microbusiness owners we surveyed in the region were in favour of.”