Business leaders in the North East have expressed disappointment in the Chancellor after the announcement of a scaled-back package of support for businesses from April.

The Energy Bill Relief Scheme (EBRS) was a temporary package to support small businesses in the UK with measures that included capped energy prices. The scheme came into effect on 1 October 2022 and was intended to run until 31 March 2023, with a decision on a successor scheme due originally in December.

Yesterday the Chancellor, Jeremy Hunt MP, announced a new scheme, the Energy Bills Discount Scheme, to run in place of the former EBRS, however business leaders have largely responded to the new scheme with shock and disappointment.

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"This is so out of touch," said Martin McTague, National Chair of the Federation of Small Businesses (FSB), "Two pence off a kWh of electricity and half a pence off gas is totally insignificant for small businesses, despite costing billions to the taxpayer. The Government will inevitably have to come back.

“The current EBRS scheme provides certainty for a small business owner over their rates, and has made a material difference to the survival of many small businesses. The replacement scheme will do neither," he added.

Research from the FSB shows that a quarter of small companies anticipates either closing, downsizing or radically changing their business model when energy support is reduced after March.

Meanwhile the North East England Chamber of Commerce, a multi sector business membership organisation which supports more than 2,000 businesses, criticised the lack of detail in the new plan.

According to Thomas Lonsdale, Knowledge and Research Executive at the North East England Chamber of Commerce: “Further clarity is still needed if energy prices suddenly rise. Businesses need to know what support would be available and how much the budget would stretch to be able to plan effectively for the future and adapt to the new energy landscape."

Mr Lonsdale added, "It’s good to see manufacturing firms are being given extra support, but we’ve identified other sectors which are not supported to the same extent, such as hospitality and retail."

Previously Mr Hunt has described the scheme as “unsustainably expensive".

UKHospitality, a trade body that represents the interests of hospitality businesses has suggested that this expense is now being foisted onto businesses.

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Chief Executive Kate Nicholls said: “It was crucial for hospitality businesses to receive an extension to energy support, which has been a vital lifeline for many this winter.

"Our analysis shows the new, lower level of support will see a total £4.5 billion hike in bills for the sector compared to the previous scheme."