Energy bills mount as government support reduces
A snap survey by UKHospitality reveals the staggering costs the industry faces on the eve of the new Energy Bill Discount Scheme, which will reduce government support to businesses.
According to the survey, 41% of UKHospitality’s members, which comprises over 750 companies operating around 100,000 venues, have been refused a quote by an energy supplier for the “sole reason of operating within hospitality”.
Energy costs now account for 11.4% of business turnover, up from 3.4% before the crisis. UKHospitaility CEO Kate Nicholls described the £12 billion increase in costs over the last 12 months as, “incomprehensible” and “unsustainable”.
Nicholls said: “The transition to a continued, but significantly reduced, energy support scheme does not provide much comfort for anyone, especially with the £7.3 billion price tag it comes with.
“Ofgem itself has recognised this but has been unable to yet take decisive action. Its current plans to ‘consult on suggested actions’ in the summer is not at the speed the sector needs and it needs to move much, much quicker to rein in these suppliers.
“If Ofgem doesn’t feel it has the teeth to grip hold of this problem, the government needs to step in immediately to sanction those energy suppliers or immediately give further powers to the regulator.”
From 1 April, the government will provide relief through a new transitional scheme called the Energy Bill Discount Scheme (EBDS).
The scheme will offer a discount on the wholesale price rather than the unit cost of gas and electricity. Under the new plan, eligible businesses will receive a discount of £6.97 per megawatt hour on gas and £19.61 per megawatt hour on electricity. Speaking to the House of Commons, Cartlidge said this will save a pub roughly £2,300.
The initial scheme was always likely to be scaled back, and, according to the government, wholesale gas prices have now fallen to levels just before Vladimir Putin’s invasion of Ukraine and have almost halved since the current scheme was announced.
Further details on eligibility can be found on the government’s website, here.
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