The government’s decision to slash energy bills support risks stoking inflation

Ministers should be pulling out all the stops to persuade small businesses to stay the course – not scolding them , writes Martin McTague

Gambling that wholesale energy prices will continue to fall this year simply tranfers the risk of further energy price shocks to small businesses (Getty Images)

Since the onset of Covid, we’ve lost half a million small firms. Allowing more well-run businesses to go under creates a false economy – and the government’s absurd and out of touch decision to slash energy support is taking us one step closer to this nightmare.

Small businesses have been let down. They spent Christmas and New Year’s Eve worrying about whether they will survive beyond 2023, but at the same time hoping there’d be a way to get through this unprecedented energy price crisis.

Just like that, after keeping us in suspense for weeks, small firms’ last bit of optimism was crushed, by a less than 10-minute and much-delayed speech. The outgoing scheme has made a real difference to small companies. But our research shows that, if we face continuing high energy prices, a quarter (24 per cent) of small firms will consider whether to close, downsize or restructure when energy support largely reduces in March.