A Mid and West Wales Senedd Member has warned that thousands of small businesses will face “crippling” energy price rises when their current contracts end jeopardising the sector, especially in rural areas such as Pembrokeshire.

Eluned Morgan says that the UK Government must act before it is too late as volatility in the energy market drives up the cost of gas and electricity for businesses where, unlike household contracts, unit rates are not capped.

Speaking of her own experience, Eluned said: “There is currently no certainty in the energy market which means a bad deal for all of us but that is especially so for small businesses who are trying to keep energy costs down and remain competitive.

“Like many others, the business contract for my regional office is coming to an end. The new contract prices being quoted are frightening and the knock-on effect across the economy will be wide ranging.

“The market has contracted significantly, with some energy firms closed to new customers and existing customers finding it very difficult to take out new contracts because wholesale prices in the UK are sky high right now.”

The FSB has also warned of a ‘toxic cocktail’ of rampant inflation, high taxes, soaring energy costs and shrinking economic growth with predictions of an economic recession forecast.

Eluned continued: “In Pembrokeshire, small businesses are an important part of our rural economy.

“We cannot underestimate their importance and they have continued to provide jobs throughout the last 12 years of austerity and the pandemic.

“However, the problems of inflation, crippling energy price rises and a failure of the UK Government to get a grip on the energy market now places small businesses in a precarious position.”