Possible mass winter closures as energy bills balloon to 300 percent

Industry leaders call for urgent governmental support in face of mass closures this winter due to rising energy bills

According to The Telegraph, a joint letter has been sent to Boris Johnson, chancellor Nadhim Zahawi, and business secretary Kwasi Kwarteng by the UK's leading hospitality groups, such as UKHospitality, the Night Time Industries Association, the British Beer & Pub Association, the British Institute of Innkeeping, and the Music Venue Trust.

In the letter, the groups said the situation was "no less of a threat" than the drought that Brittian is currently dealing with. Trade bodies have also called for "urgent action" to help with bills. They state the government should not "allow the stasis of party politics to stifle the urgent delivery of action on energy."

The sector is specifically calling for a cut to VAT or an energy price cap, as there already is in place for customers. 

This letter comes as pubs and restaurants prepare to sign new energy deals as old tariffs expire this autumn. Because of this businesses are facing increases of 300% in the new deals offered. Due to this large increase, the letter, which was signed by groups representing tens of thousands of venues across the country, warned that "not all businesses will be able to survive this onslaught."

Even though ministers have been engaging with hospitality bosses for weeks, government insiders said the cabinet has agreed not to make any major announcements or fiscal decisions until a new leader is selected.

However, Kwasi Kwarteng did take action to support energy-intensive industries, such as producers of glass, ceramics and paper. On Friday, the Department for Business, Energy and Industrial Strategy said it was considering subsidising bills for the industry to help save the 60,000 jobs in the industry. 

Unfortunately, there are no signs of similar support for hospitality. 

The letter said: “On Friday, the government saw fit to declare a drought, in the face of inarguable evidence that weather conditions had caused a threat to the nation. The energy crisis is no less of a threat and deserves similar attention.”

A recent survey has shown that one in four hospitality bosses are considering closing their establishments due to steeper bills. 

According to Alan Morgan, chief executive of The Big Table Group, support has "never been more critical" given the increase in energy prices is so steep “that it moves many reasonable businesses to a position of struggling to make profit at all.” Along with that, he said he was expecting a “significant amount of closures across the industry”.

In a similar vein, Clive Watson, executive chairperson of City Pub Group, said that there "has to be a price cap, otherwise pubs will start to close during the winter.”

Along with this many businesses have already drawn up plans to curb their energy use over the winter months, with hotels looking at shutting spas or closing entire floors, and theatre chiefs are considering whether they can change how much lighting or air conditioning they can use in venues to lower their costs.

Ali Carnegie, managing director at energy broker Total Energy Solutions, said businesses that tried to sign new energy deals were “shocked at how much the prices have gone up.”