One in four small businesses in Glasgow is at risk of closure or downsizing, following the UK Government’s decision to reduce support for energy bills, it has been warned.

Business leaders made the dire prediction as a Glasgow MP called on the government to come back with a new package.

Already this winter, a number of small firms in the hospitality trade have closed with cafes, bars and restaurants announcing they are shutting their doors for good.

READ MORE: Popular Glasgow cafe forced to shut amid cost-of-living crisis

Support will still be offered, until March 2024, but at a lower level.

From April, most businesses will receive discounts of only 0.7p per kilowatt-hour on their gas bills and 2p/KWh on their electricity bills.

The discounts are a reduction in the current support, which caps wholesale prices for most businesses at 21.1p/KWh for electricity and 7.5p/KWh for gas.

The government said it has been “clear that such levels of this support, unprecedented in its nature and huge scale, were time-limited and intended as a bridge to allow businesses to adapt”.

Carol Monaghan, Glasgow North West SNP MP, said analysis, conducted by the Federation of Small Businesses, has found that one in four small firms anticipate closing, downsizing, or making radical changes when the UK Government slashes the existing support.

READ MORE: City centre cafe closes as new business 'arriving soon'

She said: “The short-sightedness of this scheme is hard to fathom. The UK Government insist that tackling soaring inflation is their number one priority, yet they have come up with a scheme that will force businesses to increase their prices in order to survive.
“In Glasgow, small businesses, including cafes and restaurants, are vital to the economy. "The UK Government must come back with a robust long-term plan to properly support businesses in the months ahead.”
Andrew McRae, FSB Scotland Policy Chair, said: “This is a significant reduction in support – and it will have real-world impacts. 

“Energy costs are still the single biggest challenge for many of our members, with six in ten reporting utilities as the main driver of cost increases.”

Jeremy Hunt, Chancellor of the Exchequer, said: “My top priority is tackling the rising cost of living – something that both families and businesses are struggling with. That means taking difficult decisions to bring down inflation while giving as much support to families and businesses as we are able.”