The Fed urges government to help independent retailers manage spiralling energy bills

Regulator Ofgem sets a cap for domestic energy use but there is no similar cap for business

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The Fed has called on the UK chancellor, Nadhim Zahawi, for urgent financial help for independent retailers facing soaring energy bills.

In the letter addressed to Zahawi and busisness secretary Kwasi Kwarteng, The Fed’s national president, Jason Birks, said the future of independent stores was under threat, despite them being part of the fabric of society. “Independent convenience retailers play a critical role in communities across the UK,” he said.

“We help raise much-needed funds for local causes, give young people their first jobs, keep an eye out for our elderly or disabled customers and provide store-to-door news and delivery services.”

He warned: “With the cost-of-living crisis and sky-high energy bills, our livelihoods and the future of the independent convenience retail sector is in doubt.” Alongside immediate financial help, The Fed has also called on the government to extend the energy price cap to businesses.

Currently, regulator Ofgem sets a cap for domestic use, but there is no similar cap for business. Laying bare the impact the energy crisis was having on retailers, Birks advised that a store owner currently paying £1,500 per month for electricity would shortly face a bill of £4,500 per month.

“Such an increase would make the business unviable, through no fault of the retailer concerned,” he wrote. “As the energy price cap does not apply to businesses, there is no limit to what our members could be charged over the coming months.

“When these soaring energy bills are added to falling margins and rising payroll costs, it may only be a matter of time before customers lose access to the groceries and services that local stores provide – but, more importantly, they will also lose the heart of the community.

“To survive this crisis, we need more financial support from the government and for the energy price cap to be applied to businesses, too, even though this may be too little, too late,” he said.

At the time of writing, newly elected prime minister Liz Truss had not outlined any detailed plans to help businesses through the energy crisis. She has promised to temporarily suspend the green levy on energy bills – an excess of around 8% that contributes to renewables projects and social projects – which businesses do pay.

Last week, Zahawi told Bloomberg he was working on a “package of support” to help businesses. “Small and medium-sized businesses have seen their bills go up fourfold. I worry about the scarring effect on those perfectly viable businesses,” he said.

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