A dry cleaner based in Wrexham has voiced concerns about the significant difference in energy costs between his business and those only 10 miles away. Mike Jones, owner of Borras Dry Cleaners, highlighted how small and medium-sized businesses in north Wales and Merseyside are expected to pay 13% more in electricity bills compared to London due to additional charges beyond wholesale energy costs. Jones expressed frustration at being charged 8% more than the UK average, impacting their already thin profit margins. Cornwall Insight, an energy bill forecaster, emphasized the evident regional disparities faced by small businesses in the UK.
Jones explained that their running costs were already on the higher side, and the surge in energy bills would further strain their profitability. The disparity in energy costs hits north Wales and Merseyside particularly hard, with small businesses expected to pay nearly £13,000 more annually compared to the average UK enterprise and a staggering £19,000 more than businesses in London, according to research by Cornwall Insight. Jones lamented how businesses just a short distance away in England were paying significantly less, putting local businesses like his at a disadvantage without clear reasons for the discrepancy.
Third-party charges, which make up around 60% of a business’s electricity bill, vary across regions and encompass costs beyond the fuel price, including network charges like distribution and policy costs for government initiatives like renewable energy. Cornwall Insight’s research highlighted that around 81% of UK businesses anticipate raising prices due to escalating energy bills, underscoring the challenges faced by many small and medium-sized enterprises operating on narrow profit margins. Jones mentioned the dilemma of potentially having to increase prices due to soaring energy costs, a move that could deter customers from utilizing their services.
The uptick in energy expenses compounds with recent hikes in employers’ national insurance and other utility bills, contributing to a scenario where businesses are passing on additional costs to consumers. Dr. Craig Lowrey from Cornwall Insight recommended that businesses reassess their energy strategies, explore switching options, and consider efficiency measures to mitigate the impact of rising costs. Concerns about mounting energy bills extend beyond businesses, with residents like Gemma Rowlands and Lauren Burdon from Wrexham expressing worry about the escalating gas, electric, and council tax bills, making it challenging to make ends meet amidst the financial strain
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