1. Questions to the Minister for Economy – in the Senedd on 14 December 2022.
2. What support is the Welsh Government offering to businesses in South Wales West in light of the cost-of-living and cost-of-doing-business crisis? OQ58888
As the Member will know, the levers to tackle cost increases on businesses, interest rates for borrowing, taxation of windfall profits and regulation of the energy market lie squarely with the UK Government. Our priority remains to support businesses to decarbonise and to save. We continue to identify opportunities to redirect resources to reduce burdens on businesses, and, of course, the Member will be aware of the statement made by the Finance Minister on non-domestic rates.
Diolch, Weinidog. The cost-of-living crisis, high inflation and rising energy costs in particular all pose huge threats to businesses in the hospitality sector especially—a sector that employs 200,000 people in Wales. And while I welcome the inclusion of more support on business rates in Welsh Government's draft budget yesterday, albeit with the caveat that perhaps support could be more flexible and targeted, there's certainly more that could be done here by Welsh Government to help businesses survive this cost-of-doing-business crisis, particularly energy-intensive businesses in the hospitality sector, such as restaurants and independent breweries. The owner of one restaurant in my region, Ristorante Vecchio in Bridgend, recently shared how their energy bill was now at £8,000 a month. So, Minister, what is Welsh Government doing to help businesses invest in energy efficiency and green energy in order to reduce their costs and help lower the carbon emissions of our businesses at the same time?
Thank you for the question. This is not just topical, it's important not just for now but for the future as well. And we're looking at opportunities both to decarbonise but I would say also to save costs and to help the bottom line, and I think it's important that we do both of those things. Some businesses will be persuaded by the broader imperatives of the climate, and others will want to know, 'Will this help me with my business, or not, because I need to survive to next month, to next quarter, to next year?' And that's exactly what we're doing. We've got campaigns that we've already launched previously, through Business Wales—the resource efficiency advisers are already in place, we have a green ambition campaign and green growth pledge through Business Wales, and we can help businesses with their ambitions to become greener and smarter. But, in particular, when it comes to direct support—and I've outlined this in both evidence to committee and, I think, in previous questions as well—early in the new year, we'll do more on launching some of the work we're going to do on specific decarbonisation support, together with the scheme that the Development Bank of Wales will provide for loan finance, to help businesses to invest in decarbonisation, to invest in energy generation, as well as efficiency, and that really should help businesses with their bottom line, in addition to the support we're providing through non-domestic rates relief here in Wales, as announced at the start of this week.
Our small and medium-sized businesses are the lifeblood of our economy, and it is in our national interest for companies to be sustained and to grow. What discussions has the Minister had with the Development Bank of Wales about the risk to businesses' viability over the next six to 12 months, and the potential for support that could be available? Thank you.
We have a range of finance support available through the development bank for small and medium-sized businesses. Part of our challenge, as has been indicated by Sioned Williams in her opening question and the follow-up, is that there are particular pressures in different parts of the economy. So, broadly, those businesses that rely on discretionary spend—and I met the visitor economy forum today—are being squeezed at the one end by reductions in consumer spend, and at the same time their costs are going up, not just energy costs, but a range of those, and they're finding that their raw material costs, food and drink, are all rising. And you will have seen today that headline inflation was 10.7 per cent, and food inflation is at 16.5 per cent. So, a range of people in different sectors have even more extreme pressures than the headline rates. And what we're trying to do is to both understand what's taking place in those sectors and the availability of the support that we have. The truth is that, over the next year, there will be a very difficult picture for lots of businesses, and we will have to prioritise the support that we have available. And often, as well as the broad sector support we have, we'll have to have individual conversations with businesses. And I would say again, for businesses that are concerned about how to find out what support is available through the Welsh Government, Business Wales is the first gateway to do so, and they can direct you to all parts of our support system, to make sure that, if we have the support available, we can help provide where it is, and, equally, if support might be available through a UK Government scheme, we can direct you to that as well.