It follows the publication last week of a Department for Energy and Climate Change report, the 'Estimated Impacts of Energy and Climate Change Policies on Energy Prices and Bills’, which highlighted the fact that energy prices are set to rise substantially.
The report analysed the extent to which new Government energy and climate change policies were cushioning the impact on homes and businesses of spiralling energy prices as a result of global gas price increases and rising network costs.
The analysis found that household bills were benefitting from Government policies and on average paying 5% less for their bills as a result of climate change policies, predicted to reach 11% by 2020.
But the report reveals that businesses that are "medium-sized energy users" are coping with bills that are on average 21% higher as a result of Government policies and they are expected to rise to 22% by 2020.
Medium-sized users are those with an annual consumption of between 2,778 and 27,777 megawatt-hours (MWh) of gas and between 2,000 and 19,999 MWh of electricity.
Meanwhile large energy-intensive users - where energy costs represent a significant proportion of their total operating costs - currently face energy costs that are on average between one and 14% higher as a result of policies, rising to between 6 and 36% by 2020.
FSB national policy chairman Mike Cherry said: "The report makes grim reading for the UK’s small businesses. The cost of energy is already becoming a make or break issue for small firms and they simply cannot shoulder a 22% increase in prices as the report predicts."
Cherry said that Government policies were failing to protect small firms from the rising costs of energy which was hitting "not only UK-plc but small and micro businesses – on which we depend for growth".
He added: "With both the Green Deal and the smart meter rollout unlikely to deliver any real benefits for the UK’s smallest firms what we really need is a radical shake up of the retail energy market to create real competition in order to help cap future price rises."
BPIF chief executive Kathy Woodward said: "This is an issue that we have, along with the Confederation of Paper Industries, been raising continually. The crucial element for the UK is that we will be competing with countries with significantly cheaper energy costs that will seriously impact our competitiveness."
