Businesses struggle as energy bills increase by more than 300%
HOSPITALITY groups and the wider business community have urged Westminster politicians to urgently introduce an energy price cap for businesses as the industry continues to struggle with rising costs.
OFGEM, the UK’s energy regulator, announced today (26th August) that the energy price cap for households will rise to £3549 a year for dual-fuel for an average household from 1st October.
However, there is currently still no price cap for businesses, with trade groups reporting that some operators are facing price increases in excess of 300%.
Scottish Licensed Trade Association (SLTA) managing director, Colin Wilkinson, said businesses “need help and they need it now”.
“There must be an energy cap for businesses, particularly for SMEs, perhaps based on the number of employees,” said Wilkinson.
“It has also been suggested that the government should introduce an energy furlough scheme to help businesses through this difficult time – in some ways, the energy crisis is having a more damaging impact on businesses than the pandemic.”
In a letter to the UK Government this month trade groups UK Hospitality, the BBPA, BII, Night Time Industries Association and the Music Venue Trust said businesses “urgently need the government and (Conservative) leadership contenders to outline a support package for the sector”.
“Not all businesses will be able to survive this onslaught, and those that can will be closely considering how they can keep their costs down just to stay afloat,” said the groups.
“Hospitality provides 10% of jobs and 5% of GDP.
“It can be a powerful driver of economic recovery and growth for the nation, but it urgently needs a kick start.”
And Scottish Tourism Alliance chief executive, Marc Crothall, said an energy price cap for businesses, lower VAT rates and extended relief on business rates “are just some of the measures we would urge governments to implement and do so immediately before we see a wave of business closures and job losses”.
“We as a nation must be able to stay competitive and that means businesses in the front line and the vital supply chain must be given a much greater degree of security and assurance around costs to allow them to adapt and flex with greater assurance of their cost base,” said Crothall.
The Scottish Government hosted an energy summit this week which was attended by energy companies and business groups.
Andrew McRae, Scotland policy chair of the Federation of Small Businesses, who attended the summit, said: “Our members are not large multinationals with the ability to absorb cost hikes or indeed negotiate terms with their suppliers.
“They have bargaining power akin to that of a private consumer, so should enjoy the same protections.”
