Ogmore MS condemns Energy Bill Support Reduction for Businesses
Huw Irranca-Davies MS/AS has condemned the UK Government decision to reduce financial support for businesses as energy bills continue to bite, with many local businesses saying they could be forced to close.
Here, Huw explains how this will affect businesses in his constituency:
The UK Government has announced that businesses will receive reduced Treasury support for their energy bills from the end of March which will put immense pressure on businesses across Ogmore, already struggling with the cost-of-living crisis.
The UK Government’s new support package is considerably less than the support package currently on offer which will be replaced by ‘transitional support’ for businesses over 12 months from 1st April 2023. Many small and medium sized businesses in Ogmore are already grappling with soaring energy costs and will not be able to survive on this new version of Government support.
The increase in production costs for raw materials has hit them hard, as has the rising energy costs. Whilst they have passed on some costs to their customers, there are limits to the extent this can be done. But to date, despite the challenges, they are managing to keep their heads above the water and are trading on reduced margins of profitability.
This also applies to other businesses of course, of all different types and scale, from high street stores to manufacturers – they are all facing unprecedented financial pressures. However, the scaling back of energy support will mean that businesses will fall into negative cash flow and become unviable, and as such we could see businesses that have provided jobs to local people for generations could go under within months.
Our SMEs across Ogmore are deep rooted in our valley communities employing many ‘walk-to-work’ people and they are extremely worried about the viability of their businesses when faced with the changes to energy support. It is essential that the UK Government provides financial support through this deeply unsettling time for business and that the utility companies pass on drops in wholesale energy prices urgently to help our businesses.
Whilst we call on the UK Government to overturn their decision to slash this much needed support, The Welsh Government has already announced several recent support measures to help with the rising cost of doing business beyond March 2023.
I would urge local businesses to check the Welsh Government or Business Wales websites for updates which will provide details on:
- Freezing of the business rates multiplier for 2023-24
- Business Rates relief
- Transitional support for businesses
- Launch of the Development Bank of Wales Loans Scheme
And much more via https://businesswales.gov.wales/campaigns/support
