MORE aid will be needed to prevent firms folding when the government’s multi-billion pound help with energy bills ends, business leaders have warned.

Business secretary Jacob Rees-Mogg yesterday announced a price cap for non-domestic energy users, which will roughly halve the price they pay per unit.

The scheme will initially run for six months, with more targeted help planned after that.

Restaurateur Andy Lennox, of the Dorset hospitality industry group Wonky Table, called the move “incredibly welcome breathing space”.

But he added: “This doesn’t solve the problem though, it just kicks the can down the road. Businesses will need to address their cost base now for six months’ time.”

He said average bills at his Zim Braai and Nusara venues would still be £6,000 a month. "This still caps electricity and gas bills at double what they were," he added.

Poole’s Lakeside fish and chip business, which has previously voiced concerns for the future of the industry, tweeted that “a price cap is welcomed but it’s more than double what we were paying six months ago”.

“We need VAT reduced to the levels that Ireland, Portugal, Spain have. Let us trade out of this crisis, not handouts. You can’t bleed hospitality any longer,” the tweet said.

Dorset Chamber chief executive Ian Girling said: “This cap is welcome and a step in the right direction, but for some businesses it may not go far enough.

“Certainly, it will mitigate the worst impact of the energy costs crisis and give many directors and owners much needed breathing space over the winter months, especially as we believe it will be applied at source which means it will be easier to access and involve less red tape.

“But six months will go very quickly indeed and there must be a plan in place for when the cap expires to ensure prices don’t simply revert to where they were before, which would leave many businesses facing a cliff-edge and others unable to survive, especially those in energy intensive sectors.”

Simon Boyd, managing director of Christchurch manufacturer John Reid & Sons (Strucsteel), said: “The price cap is to be broadly welcomed as it is significantly less than the rate we have been quoted by industry suppliers although it is still an increase of 100 per cent on our current cost.

“On the face of it, it is more bearable, although it is incredibly important that the supply chain passes all of the savings on. If so, I am confident that the price cap will prevent an immediate increase over the next six months after which time it is inevitable that more support will be needed unless conditions in the energy market change.”

Stephen Phipson, chief executive of the manufacturers’ organisation Make UK, said during a recent visit to Bournemouth Air Festival that energy bills were an “existential threat” to some businesses.

He welcomed the government help yesterday but said industry was likely to need support for longer.

“Manufacturing businesses are under huge pressure already. Many are struggling to stay afloat,” he said.

“We hope that this support can be made tangible as quickly as possible and not applied retrospectively at the end of the next quarter.”