Energy support: Some businesses 'face cliff edge over support cut'

Energy support for small and medium sized businesses will be significantly reduced under the new scheme

Some Northern Ireland businesses will not be able to survive when the government scales back its support for energy bills, the federation of small businesses (FSB) has said.

The current scheme which caps the unit cost of gas and electricity for all businesses expires at the end of March.

It will be replaced with a new scheme that offers a discount on wholesale prices rather than a fixed price.

Roger Pollen said it is a "really unwise and very disappointing" move.

Small businesses, he described, are being abandoned and "they may not have any resources left to draw on to keep themselves afloat", he told BBC News NI's Evening Extra programme.

"There will be businesses who won't be able to survive the pressures that they face," he continued.

'Cliff edge'

In its announcement, the government said it was scaling back the energy subsidies for the next financial year to £5.5bn.

The current scheme had been described as "unsustainably expensive" by the chancellor and was predicted to cost about £18.4bn in just six months, according to official forecasters.

"The government has spent a lot of public money taking off the worst excesses of the increases that have come as a result of international pressures," Mr Pollen said.

"To walk away from that investment now before you've finished the job just seems to be really unwise and very disappointing and we will be continuing to keep the pressure on the government to try and change this position so that they do a bit more for the sector that they've already done a lot for.

"We recognise that there are priorities but what we were looking for here was to avoid coming up to a cliff edge and seeing a lot of businesses just going over that cliff edge because they've withdrawn support so dramatically," he continued.

• Support for firms to be reduced from April

• Energy bill support for firms set to be cut

• Why have energy bills gone up?

Under the new scheme, firms will get a discount on wholesale prices rather than costs being capped as under the current one.

Heavy energy-using sectors, like glass, ceramics and steelmakers, will get a larger discount than others.

But firms will only benefit from the scheme when energy bills are high.

Mr Pollen said the FSB welcomed the continued support for larger firms but questions where the government have "drawn the line".

"That's a very good move and we would support that because those businesses are in extraordinary circumstances through no fault of their own, if we want them to continue to be there beyond this crisis we need to put in place the supports for it."

Smaller businesses have been "asked to ride too many storms" says a hairdresser from County Down

Sheila Hughes, who owns a hair salon in Banbridge, County Down, accused the government of "constantly hammering" small businesses with cutbacks and rate increases.

"When you're on the high street you have to have the business open... the lights have to be on, the heating has to be on," she told Evening Extra.

"The government are saying in one breath they need the high street, and in the next breath they are making the businesses suffer right across the board."

Ms Hughes said she was expecting "some form of support to continue" adding that smaller retailers are in "a very difficult position at the moment".

"People cannot afford to keep their businesses running… everybody is stretched in the margins, right across the board.

"I would say this spring is going to have a dramatic effect right across the board on the high street right across Northern Ireland.

"Independent [businesses] will hold on in there as long as they can… smaller traders will stay in there, they'll ride the storm as best they can but they've been asked to ride too many storms," she added.