Scottish firms facing 200% energy bill rises 'are the lucky ones'

Small businesses, including Christie the Baker, do not know how they will afford the energy price rises

Many small businesses in Scotland could see increases of up to 500% on their 2023 energy bills, the body which represents them has claimed.

The FSB Scotland's Colin Borland said there was a "grotesque situation" where firms facing 200% rises were "actually the lucky ones".

Airdrie-based Christie the Baker is having to find at least £79,000 for its future gas bill - a rise of £71,000.

Individual firms and trade bodies want a plan to ease the pressures.

Last week the energy regulator Ofgem, which sets the price cap on household bills, said it would rise by 80% in October.

However, unlike households, businesses are not covered by a regulated energy price cap, meaning bills will be even higher.

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Mr Borland told BBC Scotland: "We are in this grotesque situation where the people who are getting 100 or 200 percent increases on their bills are actually the lucky ones.

"Three, four, five hundred percent is not unusual for what people are being quoted and as people's fixed term deals begin to run out the situation is only going to get worse."

Colin Borland of the Federation of Small Businesses Scotland said the situation was going to get worse

Wholesale gas prices have been rising since last year and have worsened because of Russia's invasion of Ukraine and the Kremlin's decision to squeeze energy supplies to Europe.

The candidates in the Conservative Party leadership race, Liz Truss and Rishi Sunak, have come under pressure to outline what support they are prepared to give households and firms.

Whoever wins the race to be Tory leader and the UK's new prime minister will be announced on Monday.

Ms Truss said she would cut National Insurance and green levies on bills. Mr Sunak has proposed tax cuts on domestic energy bills as part of a £10bn package.

Both Mr Borland and Alasdair Smith, who is chief executive of trade body Scottish Bakers, called for an energy price cap for business.

Mr Smith said his organisation was established in 1891 and had supported bakeries through many emergencies, including two world wars and the 1970s oil crisis.

However, he said this catastrophe was like "nothing we have ever experienced before" with some members "near to tears".

Mr Smith believed a "more substantial intervention was needed" to get through the immediate crisis.

Mr Borland said that Scotland lost 20,000 businesses in the first year of the Covid pandemic. He added: "Right now one in six Scottish small businesses are telling us they are going to close, be sold or downsize in the next 12 months."

'Our gas bill has gone from £8,000 to £79,000'

Andrew Chisholm runs Christie the Baker and says his gas will cost him more than £79,000 next year

Andrew Chisholm, who runs Christie the Baker, said he was shocked at last year's £8,000 gas bill but that was nowhere near the "ridiculous figure" of £79,000 they are facing in 2023.

He explained that he was unable to confirm that figure just now. He said: "I can't even phone up and say that yes I'll take it. I can't do that and I know when it comes to 1 October when I need to do it will probably be a different figure which will be higher."

The bakery has been on the high street in Airdrie for 80 years and a new outlet has recently opened in Whitburn.

Mr Chisholm, 55, said: "We do feel a real part of the community, not only is there 50 people in the business who are local, we have people who invest in us who come into our shops every single day and it is going to become more difficult for them with the on-going costs for everybody.

"The intervention we had through Covid should still be here, we as a business had some reserves and we used those reserves through Covid so like most other businesses we are coming through Covid into this situation with no reserves, plus a 10 times increase on raw materials and power costs - it's unsustainable, we need help."