FSB alongside 11 other trade associations penned a letter and urged the Chancellor to adopt the 'Help to Green' voucher scheme.

The Federation of Small Businesses (FSB) is leading a coalition of business groups to call for a "Help to Green" scheme that could help increase energy efficiency, ahead of next week's Spring Budget.

In a letter to Jeremy Hunt, FSB alongside 11 other trade associations representing businesses of all sizes and sectors, have urged the Chancellor to "take decisive action, whilst empowering businesses to be part of the net zero transition through the introduction of a 'Help to Green' voucher scheme".

The signatories include Coadec, the Association of Convenience Stores, British Chamber of Commerce, British Independent Retailers Association, British Retail Consortium, Institute of Directors, Energy UK, Make UK, Society of Independent Brewers, The Federation of Independent Retailers and UK Hospitality.

The groups suggest a voucher of up to £5,000 per business that could be used to invest in green improvements to their premises, such as a heat pump, better insulation, solar panels or digital tools that help businesses to cut emissions, lower their energy bills, and be more innovative in energy saving.

The scheme should not be limited by size thresholds or other restrictions that would see the smallest firms, who need this the most, excluded. It is also important to ensure that vendors of all sizes can apply to offer their products and services through the scheme.

"Help to Green" was first proposed by FSB as part of its net zero campaign for COP26 in 2021. Since then, a growing number of business leaders and sectors have endorsed this targeted intervention, in part as a tool to safeguard businesses in the face of future energy shocks.

Former Energy Minister Chris Skidmore has also adopted the proposal in his government-commissioned Net Zero Review, in which he suggests the launch of a 'Help to Grow Green' campaign, offering information, resources, and vouchers for SMEs to plan and invest in the net zero transition by 2024.

The current energy price crisis has highlighted the importance of greater energy efficiency and microgeneration among small businesses, whose net zero ambition is being held back by the lack of funding support.

FSB's research shows that 33% of small businesses have yet to take steps to address their energy usage. This group of small firms cite lengthy or uncertain return on investment (24%), lack of capital (22%) and the inability to access affordable finance (8%) as key barriers.

FSB national chair Martin McTague said: "The case for the launch of a 'Help to Green' scheme has never been stronger - the volatility of the global energy market, the soon-to-end Energy Bills Relief Scheme and the UK's net zero target have provided every reason for the Chancellor to give small businesses the fuel to invest in energy efficiency.

"Business groups from across the board have come out and endorsed this FSB initiative, which would reduce energy bills and in turn ease the cost-of-living crisis, but also help accomplish Jeremy Hunt's target to reduce energy usage by 15% in seven years' time.

"With around a week to go before the Spring Budget, small firms are hoping their green ambitions will be met with positive policy decisions to secure the long-term sustainability of the UK economic recovery."

Two key elements of FSB's 'Help to Green' proposal:

• An online hub of practical information on how to reduce energy usage and environmental impact. This could be operated by the new, purpose-built Department of Energy Security and Net Zero. If firms could get access to an energy audit at the same time, this would make the scheme even more useful.
• A voucher/grant scheme, with a value of up to £5,000 per business, which would equate to a grant contribution to qualifying environmental goods and services. This would allow a small business to conduct an energy audit, to better understand their business's energy use, followed up by the opportunity to reduce their energy use by investing in energy efficiency or microgeneration.