SCC tells MPs higher energy costs are holding Scotland’s businesses back
SCC Chief Executive Charandeep Singh gave evidence to the Scottish Affairs Committee on 4 February, telling MPs that high energy costs are no longer a temporary shock: they are now embedded in day‑to‑day operations and shaping Scotland’s economic future.
The session formed part of the Committee’s wider inquiry into GB Energy and the Just Transition, with this panel examining the ongoing impact of the energy cost crisis on households and businesses.
High energy costs continue to impact Scotland’s SMEs
Although the acute phase of the energy crisis has eased, SCC’s evidence shows that energy affordability has become a structural pressure for SMEs.
Across SCC’s Quarterly Economic Indicator surveys from 2022 to the end of 2025, an average of 62% of firms consistently reported energy bills as a major challenge. Many remain locked into contracts agreed at the height of the crisis, and prices are still up to 75% higher than pre‑crisis levels.
As a result, businesses are delaying investment, absorbing costs at the expense of wages or reinvestment, and taking a more cautious approach overall.
Why SMEs are uniquely exposed
Charandeep highlighted a key message to MPs: SMEs fall through the gaps of the current support system.
They are not covered by the energy price cap, receive none of the targeted support available to energy‑intensive industries, and have far greater exposure to price volatility.
One services firm in Dundee captured the experience: “What a lottery that the chances of business survival should be so dependent on your contract date.”
Remote and rural businesses face additional pressures
Charandeep also warned that there is a penalty on geography when it comes to higher energy costs.
Over 55% of rural dwellings in Scotland are not connected to the gas grid, and rural and island businesses often rely on more expensive, more volatile fuels such as heating oil and LPG. Standing charges – already a contentious issue – make up a disproportionate share of costs for low‑usage and seasonal firms, which are far more common in rural Scotland.
These combined pressures affect not just business viability, but the resilience of the local communities that depend on them.
Charandeep appeared alongside Stephanie Mander, Social Justice Policy Manager at Citizens Advice Scotland, and Lawrence Johnson, Co‑Chief Executive of Scarf, an Aberdeen‑based fuel poverty charity.
SCC remains committed to representing businesses across Scotland and will continue working with policymakers to shape solutions that support business competitiveness and accelerate progress towards a clean, secure and affordable energy system.
