Calls for urgent inquiry over missing energy payments
The UK government is facing demands for an urgent inquiry into evidence that energy support is being withheld from hospitality businesses, causing an “increased financial burden”.
Hospitality operators have told Sacha Lord, the night time economy adviser for Greater Manchester, that they haven’t received any of the entitled support since it was introduced last September, and now fear they will miss out altogether once reductions are brought in from the end of March, as announced by UK chancellor Jeremy Hunt.
Many operators may be ‘unlikely’ to cope with the increased financial burden that the expected energy prices will bring, especially on top of existing Covid-19 loan repayments due.
Lord said: “Pubs, bars and restaurants have been most damaged by the economic turbulence of the past three years, and support is now being pulled from under businesses that are only just beginning to recover.
“From the end of March, we will see a hailstorm of damage inflicted on businesses, from the removal of energy support to rises in income tax thresholds, which will further affect consumer spending. Unfortunately, we will see many businesses close down as a result of these extra pressures.”
Lord commented that some businesses are seeing energy bills “exceeding rent payments”, while others have temporarily shut sites during the colder winter months to save on gas and electricity costs.
Lord is meeting with MPs next week to discuss the issue.
“We also have evidence of energy providers who have either not yet applied any government support payments to business accounts, or have not applied the full amounts owed, and we are urgently pressing Ofgem and the government to investigate,” he continued.
Damien O’Shea is a director at Manchester-based Heaton Hops bar in Stockport, and said he has not “seen any government support discount” applied to his energy bills yet.
On Sunday 22 January, EDF, one of the UK’s largest energy providers, revealed that it is failing to pass on emergency government help with bills to about 2,000 small businesses.
Hospitality trade bodies recently voiced ‘very serious concerns’ about the government’s £5.5 billion (US$6.7bn) energy scheme to support businesses, with reductions to end in March.
Lord continued: “We are moving from one financial crisis to another, and the Treasury urgently needs to put forward a long-term financial plan, which will not only secure economic growth and stabilise the industries currently in peril, but instil confidence in business owners across the UK.”
The current level of energy bill support was deemed “unsustainably expensive” by Hunt, before he told business groups that it cannot continue at its current rate.
Research by real estate advisory Gerald Eve showed only 80% of the money available from the government’s £1.5bn (US$1.8bn) Covid-19 additional relief fund had been paid. The fund was set up to help businesses that were not covered by other tax relief schemes.
The data also found that eligible companies missed out on approximately £300 million (US$371,755m) of business rates relief in total.