There is some welcome relief on energy bills — but only if you’re a household

There is some welcome relief on energy bills — but only if you’re a household. From April, the Energy Price Cap will cut typical domestic energy bills by around 7 per cent, reducing annual costs by roughly £100 for the average household. That matters, because energy prices have been one of the biggest drivers of the cost-of-living crisis. But for small businesses, there is no cap, no protection and very little comfort. Retailers, cafés, pubs and workshops are still exposed to volatile wholesale prices and often locked into fixed contracts agreed at the height of the energy crisis, leaving many paying double or more what they did just a few years ago.

Energy is a core cost of doing business, particularly in hospitality and retail. The British Chambers of Commerce has repeatedly found that a majority of small firms say energy costs remain unaffordably high, with many reporting bills 50–100 per cent above pre-2021 levels. While households may feel slightly better off and able to spend a little more as energy bills ease, that benefit risks being cancelled out if businesses are forced to keep raising prices simply to cover their own overheads.

And energy is only one pressure among many. From April, employers face higher wage bills following the latest minimum wage increase, alongside higher National Insurance contributions. Business rates remain a stubborn burden, especially for high street firms with physical premises, and unlike energy bills, there is no seasonal dip or market-driven relief in sight. Add in rising water charges and council tax for households, and any extra consumer spending power looks fragile at best.

The result is a widening gap between falling headline inflation for consumers and what many business owners describe as their “real” inflation — the combined cost of energy, wages, tax and compliance rising far faster than prices on the supermarket shelf. Unless there is a concerted effort to bring down the cost of doing business, the relief households see on their energy bills will continue to leak away through higher prices, closures and lost jobs.

Cutting household bills is good news. But until businesses are given similar breathing space, it won’t feel like recovery — just a brief pause before the next squeeze.

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