Energy crisis: Warning of slashed wages and redundancies
The energy price cap, calculated by Ofgem, is a backstop protection from the Government. It applies to those on a default energy tariff, whether you pay by direct debit, standard credit or a prepayment meter, but does not apply to businesses.
The cap on pricing for households would increase from £1,971 to £3,549 from Saturday 1 October – an increase of 80% - the energy regulator announced on Friday 26 August.
UKH chief executive Kate Nicholls said while the energy cap didn’t apply to businesses, the steep rise for already cash-strapped consumers meant they would be likely to cut back on visiting hospitality venues or, worse still, stop going out altogether.
Hard times ahead
She continued to say higher energy prices also effected hospitality employees, who now face even higher energy bills.
This comes after a recent survey by The Morning Advertiser revealed more than 70% of operators did not expect to make it through the winter without intervention from Government.
More than 65% said they had seen utility costs increase by more than 100%, with 30% reporting a jump of 200% and 8% reporting increases of more than 500%. Nearly 80% of operators said they could not afford the rise in energy costs.
“Without an urgent and comprehensive Government support package that helps both households and businesses, many hospitality venues are contemplating reduced trading, resulting in lower wages or lost jobs for staff who need their jobs more than ever if they’re to heat their homes,” Nicholls added.
What’s more, Greater Manchester night-time economy adviser Sacha Lord believed the news could mean “lights off” for the hospitality sector during winter, without urgent energy reduction or rebate.
Pleas for Government help
Operators are taking measures to cut down on energy costs, such as training staff to be efficient, turning down fridge temperatures and switching off equipment. Nonetheless, they have still described the situation as a “bit of a nightmare”.
The Government has responded to the current crisis of soaring energy prices, stating it will carry on offering support to the pub industry.
A Government spokesperson said: “No national Government can control global factors pushing up the price of energy and other business costs but we will continue to support the hospitality sector in navigating the months ahead.
“That includes providing 50% business rates relief for businesses across the UK, freezing alcohol duty rates on beer, wine, cider and spirits and reducing employer national insurance.
“This is in addition to the billions in grants and loans offered throughout the pandemic.”
