Energy costs 'at critical point' for West Midlands' businesses

Adrian Hanrahan, managing director of Robinson Brothers, said energy prices "could cripple" his firm without government help

Soaring energy costs "could cripple" a chemicals firm without immediate government support, its boss said.

On Thursday, ministers are expected to announce support for households facing an 80% rise in the energy price cap.

Firms are not covered by the cap, but Thursday's measures are also expected to include some relief for businesses.

Adrian Hanrahan, managing director of West Bromwich-based Robinson Brothers said its annual energy costs could jump from £1.8m to £4.2m.

"That could cripple the whole business model, that is why we really need help," he said.

Firms across the West Midlands have been facing a crisis over their energy costs, according to the Greater Birmingham Chambers of Commerce.

Firms "are months away from throwing in the towel", Henrietta Brealey, from the Greater Birmingham Chambers of Commerce, said

Chief executive Henrietta Brealey said one arts group's bills had risen by £1m annually, while a small restaurant's monthly cost has risen from £530 to more than £5,000.

"There really is the anticipation that change has to come, because it has hit that critical point for business," she said.

"For the first time, I have got businesses that could lock in to longer-term deals in energy, but they can't afford it. They are holding out on the basis that it has to change.

"There are businesses that are months away from throwing in the towel."

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Mr Hanrahan said businesses needed support as much as households.

"Cash flow for a number of manufacturing companies will be critical over the next six to 12 months," he added.

Shoppers will face higher prices if grocery firms have to pay higher energy costs, Paul Tate said

Reports suggest the support package could see the government mandate energy firms to offer specific reductions on the unit price paid by businesses.

Paul Tate, who runs grocery firm George Perry Ltd, based at Birmingham wholesale market, said without support its costs would soar and shoppers would see the effects.

"We use a lot of refrigeration here and transport, that will have an impact on all prices going forward for fresh produce," he said.