The severe winter weather in the UK in December and January has cost British business dear, according to recent polls.

Small businesses were reportedly particularly badly hit by the winter freeze-up, with 70% suffering from staff absences and a downturn in trade and losses of GBP7 billion.

According to Lloyds TSB Commercial, which polled 1,003 small businesses, SMEs lost GBP7 billion because of the severe cold weather in December and January.

Conversely, 7% of businesses actually enjoyed improved trade during the cold weather, mainly in the IT sector (with regard to the increased need for telecommuting during the cold snap) and retailers of winter clothing and accessories.

The figures show that 40% of businesses had to close for a time because the bad weather affected transport routes and supply chains.

However, a drop in trade was the biggest problem to affect small businesses because of difficulties their customers faced in reaching their premises – restaurants and hotels were badly affected in this way. Though many businesses suffered, the majority of losses were under GBP10,000.

In Scotland, small businesses were also severely affected due to the prolonged freeze north of the border. 6% of SMEs incurred losses in excess of GBP30,000 and 90% of companies suffered some degree of loss or disruption.

It has been estimated that Scottish small businesses lost GBP716m because of the adverse weather, according to figures released by the Bank of Scotland.

The bank’s Head of Commercial Banking observed, according to a BBC report, that: “Scotland's business have faced a double blow over the past few months. They have had to grapple with the downturn in trade as a result of the recession, as well as the impact of the severe weather conditions.”

Meanwhile, speaking to the Financial Times, Stephen Pegge, Head of External Affairs at Lloyds TSB Commercial, expressed concern about the affect the cold snap would have on the economy, predicting that:

“It could make the difference between 0.3% growth and 0.1% growth, but should not be taken as evidence of a double dip recession”. He went on to stress the need for businesses to "reassure customers that they are still open to business”.

One knock-on effect of the severe weather has been the increase in insurance payouts – double the number of claims usually paid out during winter.

The Association of British Insurers reports making payments of GBP650m as a result of claims made due to the bad weather. These included motor insurance claims and claims for property damage, for both households and businesses.