Small businesses hit by ‘spiralling’ inflation
Small businesses are being hit hard by ‘spiralling’ inflation; research from the Forum of Private Business (FPB) has shown.
The cost of energy is impacting on small businesses the most, as 94 per cent of the Forum’s members have seen energy bills increase over the last year.
As a result, the FPB is calling for a code of conduct to police the way that utilities companies treat small firms. In particularly a cap on back billing and fairer contracts to prevent them from being ‘rolled over’ onto more expensive deals with little or no prior knowledge.
In fact, the FPB is working with Ofgem and the Energy Retailers Association (ERA), on guidelines to reduce the impact of back billing on micro businesses.
Other rising costs that are impacting on small businesses include transport costs and the price of raw materials. The study found that the overall rate of inflation for businesses is currently at 8.5 per cent.
Commenting, FPB’s chief executive Phil Orford said: “It’s no surprise that so many of our members are feeling the pinch when it comes to energy in particular. The situation doesn’t look set to change in the foreseeable future as all of the ‘big six’ suppliers have put utility prices up in time for the peak winter season,
“We need small and micro businesses to be given better protection from practices such as back billing, where they can be charged tens of thousands following meter errors that are in no way their fault, and rollover contracts. A robust code of conduct policing the activities of energy companies would be a step in the right direction.”
Meanwhile, the research also shows that businesses are being affected by cash flow issues including competitors undercutting firms on price, and late payment. As a result, it is more important than ever that the Government does more to help small businesses.
“Our latest Referendum figures show clearly that small businesses are being squeezed from all sides, so the Government must do more to help them cut costs wherever it can,” Mr Orford added.
“Our members are also telling us that they still want to see tax reforms, such as integrating of income tax and National Insurance in order to reduce tax compliance costs.”