Smallest businesses in Wales neglected by government – new research says.

–           Microbusiness owners feel overlooked when it comes to the right support from the UK government.

–           Small business leaders say they remain concerned about high energy costs.

–           Only 27 per cent of those surveyed said they were happy with the government support in place to help with energy bills this winter.

With 5.2 million microbusinesses in the UK, having a combined turnover of £808 billion, the sector is a major contributor to the nation’s economy. But new survey results reveal that many business owners across Wales feel overlooked and misunderstood when it comes to the right support from the UK government.

Valda Energy, the company behind the research,  says that with the colder weather now with us, microbusiness owners (those with less than ten employees) say they remain concerned about high energy costs and call for more tailored help, such as a regular winter support scheme, for companies that need it most.

Steve James, CEO of Valda Energy, comments: “Only 27 per cent of the business owners we surveyed across Wales said they were happy with the government support in place to help with energy bills. And alarmingly, nearly one in five, facing rising costs, high energy prices and the impact of the cost-of-living crisis, said they feared closure over the next six to twelve months.”

According to the survey, just 21 per cent of owners in Wales do not feel the government understands their needs; with 12 per cent saying they have been neglected in favour of hand-outs to consumers and larger businesses.

A staggering 14 per cent believe the government’s Energy Bill Relief Scheme (EBRS) did not offer sufficient help over the winter months, with many believing the scheme was simply not in place for long enough. And 23 per cent of businesses said the less generous Energy Bill Discount Scheme (EBDS) that followed is providing adequate support.

Valda’s research highlights concern amongst small businesses across the region, with half (50 per cent) calling for the introduction of tailored support packages this year and 43 per cent asking for greater clarity on seasonal support schemes.

And because of additional worries relating to higher inflation and interest rates, supply chain availability, difficulties over recruiting skilled staff and industry legislation, the survey reveals that microbusinesses are struggling to plan ahead. Just over half (57 per cent) of respondents in the region said they no longer carried out regular financial forecasts and, of those that did, only 7 per cent were looking as far ahead as 12 months.

Mr James is urging industry, government and Ofgem to come together to design a tailored funded support package for those businesses most in need, including those that signed at a time of very high prices in 2022. He says: “Small businesses are vital to the success of the local economy, but their voice is not being heard. I believe the government has a duty to act now, before demand increases over the winter months, communicating to owners what support will be available this winter and providing more levelled and sustained protection for companies over the medium to long term.”

And he argued that providing the right help might not cost the government any more money than it has already pledged. He says: “One obvious helpline would be to see the underspend on the EBRS scheme – now expected to be in the region of £11bn – go towards helping businesses in high-rate fixed term contracts. Certainly, it’s an idea that 79 per cent of the microbusiness owners we surveyed in the region were in favour of.”

Micro Business Barometer Infographic