WARRINGTON South MP Andy Carter is calling on the Government to provide energy support to small businesses after hearing from a guest house owner in the town who is set to see his energy bills increase from £9,000 to an “eye-watering” £45,000 per annum.
As a result Dave Linaker, who runs the Laburnum Guest House on Wilderspool Causeway, will see his business go from being profitable to break even and he fears that many small businesses that are already only breaking-even, will close as a result of the energy crisis.
Mr Carter said: “The price of energy is set on world markets and the impact on small business is a huge problem which I’m pressing the Government to address urgently.
“Last week I heard from one small business owner in Warrington South who had seen their annual bills rise from £9,000 to £45,000. Such increases significantly alter the business model and add to secondary inflationary pressures in the overall economy as businesses understandably look to pass on those costs.
“As well as a package of financial support to help residential users, there’s also a need for the New Prime Minister and Chancellor to rapidly focus assistance on SMEs to prevent widespread business failure and job losses.”
Last year Laburnum guest house paid £9400 in gas and electric to British Gas, with their current tariff due to end in November 22.
“We have been offered a new one-year tariff fixed until Nov 23, ” said Dave, who also runs the New way Homes Estate Agency in the town.
“On the same usage, we will pay an eye-watering £45000. The dilemma we now face and all other commercial businesses face is do fix and hopefully ride out the storm or do we go onto a variable rate and hope rates will eventually reduce? There is no price cap for business energy, we have no protection at all.
The best-fixed rate is with a Japanese company who for one year will offer a price of £37000 based on same consumption.
“Speaking to two energy companies, they both advise Russia has shut down a gas pipeline for unscheduled maintenance. This is sceptical and the belief is Russia is weaponising Gas supplies i.e Putin putting pressure on the west due to its support of Ukraine.
Dave added: “We can push up prices, remove expensive dryers, cut down on heating and lighting and look for cheaper food products. We will also look at alternative energy supplies.
“The pressure on all businesses is immense, the initial panic on reviewing the new price offering has now subsided and a plan is in development. But any company can not be affected by an increase of over four times its present energy costs…
“After closure during covid, we now face this, you couldn’t make it up.
The government and councils need to step in with rate reductions or complete rate removal. Many businesses will not ride this out, particularly in hospitality.
Dave added: ” WE won’t close, for sure. The increase comes into effect from 2nd Nov. We will if the rate stays at the same, go from profitable to break even. Very concerning, at 62 when planning for retirement not supporting energy costs. Fuel, foodstuffs, and energy are taking away profits. How many companies who are just breaking even in Warrington will face closing…
“This is the cost of Support to Ukraine- Which I do support.”
