Minister welcomes new energy cap scheme but warns UK Government of need for long-term plan

Welsh Economy Minister’s Vaughan Gething has welcomed today’s announcement of the UK Government’s new Energy relief Bill Scheme but says businesses in Wales need a long-term plan from Westminster if they are to survive the impact of spiralling costs.

This morning’s announcement confirmed the UK Government will cap energy bills for businesses from October 1, cutting the expected wholesale price in half.

Ministers said that firms, schools, hospitals, charities and other non-domestic consumers will be covered by the scheme, following warnings of the devastating impact on the economy if they fail to act.

Pressures

Responding to the announcement, 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.”

Six months

The scheme announced today is for six months for 1 October and applies to all non-domestic energy users, but this will then be replaced with a targeted system focused on the most vulnerable industries.

Prime Minister Liz Truss said: “We know that businesses are very concerned about the level of their energy bills.

“That’s why we are putting in place a scheme for business that will be equivalent to the scheme for households to make sure that businesses are able to get through the winter.

“We’re going to review it after six months. We’ll make sure that the most vulnerable businesses like pubs, like shops, continue to be supported after that.”

She said the initial scheme “will apply from the first of October to make sure businesses have that security through the winter”.

The Government also confirmed it will push through emergency legislation to underpin the new relief scheme once Parliament returns from its break for the party conferences in October.

Mr Gething added: “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.”

In his response to the scheme, Welsh Conservative Shadow Economy Minister, Paul Davies MS said: “The war in Ukraine, on top of the unlocking of economies from Covid, has been driving up energy prices, causing immense concern for businesses across Wales.

“Their worries should at least in part be alleviated by the significant measures announced today.

“It is welcome to see the Conservative Government stepping in to address this pressing issue.

“For weeks, the Labour Government in Wales have passed the buck on energy costs, despite possessing some of the levers of power themselves.