Cost of living: Longer-term support for Welsh businesses urged

Businesses will need longer term help to deal with high energy costs, the Welsh government has warned.

The Energy Bill Relief Scheme will cap wholesale energy prices for all firms for six months from 1 October.

Welsh Economy Minister Vaughan Gething welcomed the support but said it was only a "temporary respite".

A Welsh Conservative minister said the package was a game changer, while a group representing small firms said it would offer "some form of certainty".

The UK government energy scheme follows a previously announced £150bn plan to help households with their bills for two years.

The scheme for businesses will expire in April, and will apply to other non-domestic settings such as hospitals, schools and churches.

• Business energy prices to be cut by half
• What is the energy price cap?

Mr Gething said the announcement "will ease some of the pressures on businesses", and said the "support is welcome".

But he added that 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".

"The measures provide businesses with only a temporary respite and little certainty to help them plan ahead," he said.

"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".

Rhian Jones, from Cardiff, said without government help her business would have to close her doors.

She opened her shop, called Green Door Bakery, in the Cyncoed area of the city four months ago.

Ms Jones said she did not think it would be fair to increase her prices as "everyone's in the same boat".

Hiking prices, she believed, would mean customers stop coming.

Ms Jones said: "It would get to the point that a lot of small and big businesses would probably end up closing because they couldn't keep up with the demand of the bills."

Jo Roberts runs Fabulous Welsh Cakes, which has two shops in Cardiff and a bakery in Barry.

She only uses electricity, and said the cost was set to climb from £3,800 to just under £20,000 from 1 October.

It was, she said, "a really difficult time".

"We probably could have [absorbed it] if we weren't seeing increases in every other area.

"But against the backdrop of the rising raw ingredients prices, it is really difficult to have increasing costs from every angle.

"We would have really struggled to absorb that cost."

Ms Roberts said it was unclear how much her energy bill would drop under the new scheme from the UK government.

"I don't know what it actually means to me and my bills at the end of the day," she said.

She questioned the decision to limit help to six months.

"This energy crisis is not going away in six months' time. So where does that leave us?" she said.

Speaking on the BBC's Politics Live programme, Brecon and Radnor Conservative MP Fay Jones criticised the UK government for not making the energy announcement on the floor of the House of Commons.

"There is a lot of detail in there that we need to see as quickly as possible and I would have liked to have seen that announcement made on the floor of the House so we could scrutinise and ask questions.

"Hopefully, we'll get that over the coming days."

The Brecon MP argued the help had not come too late for many businesses.

"I think the government has been proactive in this whole space over the last eight months... to give the prime minister her full credit, this has been her number one priority."

Federation of Small Businesses (FSB) Wales policy chairman Ben Francis 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."

Companies do not need to apply for the subsidy as the discount will be automatically applied to their bills from 1 October.

Mr Francis said the rising cost of doing business meant the situation facing his members was "extremely difficult, and energy prices are almost just the tip of the iceberg".

He added the announcement provided "some form of certainty", adding: "It allows these businesses to plan towards the Christmas period.

"We welcome the fact there will be a review after three months, which will enable all parties to take stock of the situation and of how effective the package of support has been, with a view to potentially extend it."

Conservative Welsh Secretary Sir Robert Buckland said the energy package was "unprecedented" and a "game changer".

He told BBC Wales: "Its going to offer much needed and vital relief to businesses, charities and the public sector across Wales."

But Plaid Cymru's Westminster leader, Liz Saville Roberts, said the six-month help "still fails to provide all-important certainty".

"Many will be eager to make plans beyond this point but will be unable to do so under current plans," she said.

The Welsh Local Government Association (WLGA) said much more support would be needed from the UK government.

WLGA finance spokesperson Anthony Hunt, who also leads the Labour-run Torfaen council, said: "Whilst we welcome the inclusion of councils in the UK government's six-month energy price guarantee, we will take time to analyse the detail.

"Aside from surging energy bills, pay costs and rocketing inflation are forcing councils to look again at their spending plans just to meet their legal duty to balance budgets."