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A new report from the Federation of Small Businesses (FSB) warns that the UK may not meet its obligations to halting climate change unless it makes it easier for small firms to do their part.

The Price of Power

The Climate Change Act commits the UK to reducing emissions by at least 80% in 2050 from 1990 levels. The FSB’s report, ‘The Price of Power: Energising small business in the next UK Carbon Plan’, calls on the Government to produce a new plan detailing how small businesses can contribute to closing the carbon gap through microgeneration schemes and energy efficiency measures – and wants to see fewer barriers and more incentives for small businesses to get involved in energy production.

The Government’s National Infrastructure Delivery Plan predicts that £117bn will be spent on energy infrastructure between 2016-2021, accounting for 57% of the UK’s investment in economic infrastructure – investment that the FSB’s National Chairman, Mike Cherry, says will come “at a heavy price to customers.”

“It’s important that the benefits are fair and accessible for small businesses,” he said. “Poor investment planning could place the greatest cost burden on those that can least afford it and restrict new opportunities to a lucky few.

“Many small businesses are willing and capable of becoming more energy efficient, and even generating energy. With the right support, they can play a critical role in helping the UK reach its green targets and shore up supply.

“I hope that these important points are not only taken on board in the Government’s green energy programme, but also as part of its wider Industrial Strategy.”

Energy Concerns

Research carried out for the FSB by independent research company Verve found that ‘security of supply’ was the biggest energy concern for most members surveyed (60%). Nearly nine in 10 (86%) respondents said they believe the UK is too reliant on imported energy.

The FSB points out that if small firms were allowed and encourage to contribute more to green energy production, this would help to make the UK more self-sufficient in its energy needs, as well as helping to meet climate change targets.

Around a quarter (27%) of firms believe that a low-carbon economy would create more opportunities than threats for their business – although 14% believed the opposite.

58% of respondents said they’ve made energy efficiency improvements to their business and 12% of respondents said they generate their own energy, mainly using solar panels. But the FSB feels much more needs to be done to encourage the 88% who do not.

“The UK energy sector is facing the greatest transformation since the Industrial Revolution,” said Mike Cherry. “But the whole system for incentivising and subsidising infrastructure lacks transparency, consistency, direction and ambition. It needs a strategic overhaul.

“The Government should produce urgently an updated carbon plan, looking specifically at small businesses as an audience. Without the input of an engaged and empowered small business community, the UK risks failing to meet its binding emissions targets.

“Our research shows small firms want energy security to be a priority. Brexit raises yet more questions about the UK’s future power supply. Infrastructure costs must be shared out equitably with small firms playing a pivotal role in securing Britain’s energy future.”

The FSB believe that a new carbon plan should promote microgeneration for small businesses, including the roughly half (46%) who rent their premises, and urges the Government review the effectiveness of subsidies and incentives to help small firms with green energy investment.

About The Author

Karl Bilby

We work very closely with our expert accountants to bring you the latest factually correct tax and accounting news. We also enjoy writing about small business news that we hope you find useful!

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