NTIA: energy bill support ‘insufficient’
The hospitality sector has welcomed the UK government’s six-month scheme to cut energy prices for businesses, however trade bodies are calling for more support.
The UK government has revealed its new Energy Bill Relief Scheme to reduce energy costs for businesses, charities and public sector organisations that have experienced ‘significantly inflated’ increases.
It will apply to fixed contracts agreed on or after 1 April 2022, as well as to deemed, variable and flexible tariffs and contracts.
The scheme will apply to energy usage from 1 October 2022 to 31 March 2023, running for an initial six-month period.
Kate Nicholls, CEO of UK Hospitality, said the trade group was “relieved” that the government had listened to the problems facing the industry with energy suppliers.
She said: “This intervention is unprecedented and extremely appreciated as we head into an uncertain winter with numerous challenges on many fronts.
“The inclusiveness of the supports announced today – covering businesses small and large – will be extremely beneficial to the sector. A sector that provides a huge number of jobs, many of which are now more secure.”
‘No cliff edge’
However, Nicholls noted that the industry needs a “comprehensive package to safeguard businesses and jobs”.
She added: “The levers of reduced VAT and business rates reliefs are still available to the government, and there must also be a comprehensive package to ensure that there is no cliff edge when these measures fall away.”
Trade group the Night Time Industries Association (NTIA) also welcomed the announcement, but warned it may not provide “sufficient relief” to businesses.
Michael Kill, CEO of NTIA, said that energy suppliers “remain free to impose additional mark-ups such as network charges and operating costs, which are uncapped”.
He said this could result in smaller firms “still being asked to pay unaffordable energy bills of several hundred percent more than in previous years, which is clearly not sustainable”.
Kill also highlighted that the scheme excludes businesses that renewed their contacts before 1 April.
He warned that the scheme “does nothing” to help businesses that have already accrued high levels of energy supply debt from the previous uncapped quarters.
The proposal is “unlikely to be enough to ensure businesses have the financial headroom to survive this winter”, he added.
As such, Kill is calling on the government to extend the relief scheme to 12 months.
In the upcoming UK budget statement this Friday (23 September), Kill is calling for further action from new chancellor Kwasi Kwarteng to support the industry, including business rates relief and a reduction in VAT.
He added: “We must note that the measures being discussed to date such as corporation tax relief will simply not be sufficient, given only one in four hospitality businesses would currently benefit from such measures, as three out of four are not trading profitably.”
Some hospitality companies have already faced a 500% increase in energy prices.