Energy costs bring sector to 'tipping point'

By Rebecca Weller

- Last updated on GMT

Too much to bear: SLTA managing director Colin Wilkinson (pictured) has called for urgent help from Gov to help sector through winter
Too much to bear: SLTA managing director Colin Wilkinson (pictured) has called for urgent help from Gov to help sector through winter

Related tags Scottish licensed trade association Legislation Finance Energy costs

The Scottish Licensed Trade Association (SLTA) has called for an energy cap for businesses and urgent help from the Government to support the sector through the winter as energy costs continue to soar.

This follows the announcement from energy regulator OFGEM the domestic energy price cap​ would increase to some £3,500 from Saturday 1 October.

SLTA managing director Colin Wilkinson said: “What is happening domestically affects businesses as people will reduce their outgoings to pay soaring energy bills and hospitality is very much in the firing line.

“We’re already hearing of pubs and restaurants now considering closing​ over the winter period because they are unable to absorb recent sharp increases in energy bills.

More cost to absorb 

“Already, there are reports of energy prices increasing by 300% and, in one case, just under 500% and energy providers requiring ‘bonds’ from hospitality owners looking for an alternative supplier.

“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.”

Wilkinson continued the Government could further support the sector by introducing an energy​ furlough scheme as the energy crisis has, in some ways, had a more damaging impact on businesses than the pandemic.

Furthermore, the energy price cap increase follows the news inflation​ had exceeded 10% earlier this month, with Wilkinson warning this, coupled with the energy crisis​, could prove too much for some businesses to bear.

He added: “Just when the hospitality sector is starting to recover from the pandemic, businesses have yet more costs to absorb. Most are still paying off debts incurred during Covid.

Tipping point 

“Businesses have also been affected by the train strikes​, many have reduced their opening hours because they can’t get staff​ and others are having to incur extra costs in finding staff who left the industry during the pandemic and because of Brexit.

“We’ve definitely reached a tipping point.”

The SLTA​ managing director called for urgent measures such as a reduction in the rate of VAT and lowers business rates, having already urged the ingoing Prime Minister to adopt a business first approach to protect businesses​ and jobs and stimulate economic growth.

Wilkinson​ said: “It’s no exaggeration to say many people are facing a winter of discontent as they tighten their belts and reduce their outgoings, and it’s no different for businesses which must also find ways to save money without putting up their prices.”

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