Welsh businesses have welcomed the UK government's energy bill support but said more help is needed. The government announced its Energy Bill Relief Scheme to help firms facing soaring costs this winter.
The support sees an energy price cap for all businesses from 1 October until April 2023, cutting the expected wholesale price in half. Businesses will not need to apply for the subsidy as the discount will be automatically applied to their bills from next month.
The cap will apply to other non-domestic settings such as hospitals, schools and churches. However, PM Liz Truss said shops and pubs would benefit from support with their energy bills beyond the initial six-month scheme.
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Chancellor Kwasi Kwarteng is set to give more details of Government business support in his 'fiscal event' mini-Budget tomorrow.
The Federation of Small Businesses for Wales said the energy bill support was welcome but small firms couldn't be allowed to fall through the cracks.
Ben Francis, FSB Wales policy chairman, said: "It's worth reflecting on the fact that FSB Wales' members are not multinational corporations, they are not FTSE 100 businesses.
"These are small businesses, owned by normal people with mortgages to pay, mouths to feed and, just around the corner, with Christmas to plan for. They have clawed their way through the Covid-19 pandemic. Now, out of the other side, they have been met with this unprecedented hike in energy costs."
He added that yesterday's announcement gave "some form of certainty" as it would allow businesses to plan towards the Christmas period.
"The cost of doing business crisis is a battle on many fronts and requires the efforts of all governments. Alongside this announcement, we’ll be looking for further support from the Chancellor in Friday’s mini-Budget and the Welsh Government too need to re-introduce the 100% rates relief holiday to help alleviate the intolerable pressure on Welsh SMEs," he said.
Roy Allkin, owner of Boss Brewing Company in Swansea and chairman of the Society of Independent Brewers (SIBA), agreed that the energy price guarantee was a welcome first step but hopes the Chancellor will go further.
"Small independent brewers will be looking towards Friday's fiscal event for further certainty on the major issues facing the sector," he said. "Many independent brewers have been hit hard by the recent spikes in energy prices and today’s bold step will give them six months of headroom."
He added: "However given the uncertainty in the energy markets, there is a danger that a cliff edge will be created next year and serious questions remain about the criteria being used to identify the most vulnerable businesses that will be eliglble for further support.
"We hope that the Chancellor will go further on Friday and look at ways to help create resilience in the industry through small business grants to move to green technology as well as certainty on their ambitious plans for the alcohol duty system including the new draught duty rate.”
Lionel Benjamin, co-founder of AGO Hotels which operates the Ibis hotels in Swansea and Newport, said the support doesn't go far enough.
He said: "Whilst this is a positive announcement, particularly in terms of its reach protecting both small and large businesses, we believe this will only mask the problem for a short while as it only applies until March 2023.
"At our hotels, until recently we were operating with energy costs between 8%- 12% of our total operating costs, this has now risen to 30% of operating costs, so whilst this announcement goes some way to help, more will need to be done longer-term to stop businesses collapsing. The effect of rising bills on businesses will continue for many months and maybe years."
He added: “To support us further, we are continuing to call for the Government to provide a stimulus package, including a VAT reduction to 12.5%, a business rates holidays and a reduction in corporation tax.”
Lloyd Powell, head of ACCA Cymru Wales said: “The announcement from the government addressing the rising cost of energy for businesses is welcomed by ACCA.
“While a support package had been announced for consumers, businesses faced uncertainty with rising energy costs alongside higher interest rates and supply chain disruption. Capping the rates at which businesses can be charged for their energy usage has pulled many businesses back from the brink who were faced with shutting their doors or increasing prices by an astronomical amount to keep the lights on.
“However, further balanced action needs to be taken by the UK government to ensure that SMEs - the backbone of Wales’ economy - can navigate this uncertain time. All eyes will be on the upcoming fiscal announcement and the support that will be provided to businesses in both the short and the long term.”
Economy Minister Vaughan Gething, said: “Today’s announcement will ease some of the pressures on businesses and I urge the UK Government to pass the necessary legislation swiftly so that the full discounts are passed onto Non-Domestic customers and without delay.
“While the support is welcome it may not be sufficient for many of Wales’s small and medium sized businesses which are facing up to six-fold price increases in their energy bills. A high proportion of these businesses are already struggling to break even post-pandemic.
“Wales’s small businesses are the backbone of our communities providing vital jobs and incomes for local people and part our foundational economy. If these businesses fail, we will see increased unemployment, increased vulnerability and disruption to important supply chains.
“The measures provide businesses with only a temporary respite and little certainty to help them plan ahead. Many will be forced to close if they are not sufficiently supported. Therefore, I call upon the UK Government to commit to a longer-term plan to give more certainty to enable businesses to cope with persistent high energy costs
“We are closely scrutinising the UK Government support announced today to see whether there is more we can do to support Welsh businesses. This includes looking at ways of helping businesses reduce energy usage or increase energy efficiency.
“However, let’s be clear, the main levers to support businesses rest firmly and squarely with the UK Government.”
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