By Daniel Hunter
Nine in 10 (94%) small businesses believe energy prices are about to go up again, with two thirds (67%) anticipating a rise of 10% or more over the next year, according to research from price comparison service Make It Cheaper.
However any further rise in the cost of energy is likely to provoke anger among business owners who already think that they are paying too much for their gas and electricity. When asked which overhead they consider to be most unfairly priced, the 500 respondents to Make It Cheaper’s survey of business owners answered:
28% = Energy
21% = Petrol/Diesel
15% = Business Rates
13% = Bank Charges
9% = Insurance
6% = Employment Tax
4% = Rail Fares
3% = Rent
1% = Loans
Furthermore, the energy industry’s recent claim that pressure on prices is primarily due to an increase in the taxes they are obliged to collect on the government’s behalf seems to have fallen on deaf ears. Almost half (45%) of businesses blame the suppliers’ push for profits as the reason behind the 10% rise in business electricity prices over the past 12 months, with only one in 10 pointing the finger at the government’s environmental policy.
When asked for the most likely cause of energy price inflation, the answers were as follows:
45% = The suppliers' determination to make a profit come-what-may
23% = Too much reliance on energy being imported into the UK
11% = The government’s environmental taxes/subsidies included in bill
10% = Lack of competition between suppliers in the UK energy market
6% = Demand for energy from fast-growing overseas economies
5% = Funding capital expenditure on the UK’s energy infrastructure
“Of all the overheads we speak to businesses about, the relentless rise in energy prices has caused the most bitterness. For whatever reason, over half of businesses have ended up on the wrong kind of energy contracts with some paying in excess of 20 pence per unit for their electricity," Jonathan Elliott, managing director of Make It Cheaper, commented.
"A quick phone call to us, for example, will tell you that new contracts are available at around 10 pence a unit for electricity or just under four pence a unit for gas.”
Entrepreneur and small business advisor, Doug Richard, added: “The disproportionate cost of energy looks set to remain public enemy number one, certainly for the business community. Anyone holding on for a drop in prices is in for a long wait. The best way to keep a lid on your energy bills is to get into a regular switching habit. And at whose expense would that be? A handful of foreign-owned energy companies who’ve had their hands in the cookie jar for years. I can live with that.”
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