Hopes that new measures will protect island firms

The warning came as the UK Government announced on Wednesday a package of measures to support businesses throughout the country. However, detailed scrutiny will be required before an assessment can be made of whether it will meet the needs of small retail businesses.

Ronnie Scott of Islander Shellfish in Stornoway was hit by an electricity bill from SSE for April to July which is five times more than the previous one – £2428.58 against £487.86. Before that, he had been paying around £400 per quarter.

Mr Scott was eventually able to negotiate a reduction from SSE but would still be paying almost four times more than he was previously expecting to pay, prior to Wednesday’s package. The nature of his business means that there is “no leeway for switching off fridges and freezers”.

He said: “From conversations I am having, I think that many shops are going to find it very hard to survive, particularly the ones selling non-essential items. They certainly can’t survive without passing on these charges to the public”.

Referring to uncertainty around the newly announced measures, Mr Scott said: “Even if they are going to freeze it, what are they going to freeze it at? We will need to look very closely at the implications for small businesses like our own”.

Mr Scott supported a windfall tax on energy generating companies that are making “colossal profits” to support small businesses which are at the sharp end of massively increased energy bills.

As we went to press, business owners were trying to decipher the implications of the new package of support announced by the UK Government which will involve discounting wholesale power prices for companies, charities and public sector organisations, including schools.

Under the plan, they will be given support for six months to protect them from soaring bills. Further help will be offered to companies in “vulnerable industries” thereafter

The price cap from the energy regulator for Great Britain, Ofgem, on the typical domestic bill does not apply to businesses, meaning firms had been facing costs that were due to rise even more sharply than for domestic users.

The government has now announced a “supported wholesale price” expected to be £211 a megawatt hour for electricity and £75 a MWh for gas, which it said would be less than half the wholesale prices anticipated this winter.

The cap means that electricity prices for business customers will still be about double what they were in October 2021, when the price per megawatt hour was £117, but more than half the forecast winter prices of about £540.

The scheme limits the price suppliers can charge customers for units of gas and electricity. The Government says that businesses will not need to take any action, as the discounts will be automatically applied to their bills.

The changes will apply to new contracts from 1 October.