In a letter to Chancellor Rachel Reeves, the trade body reiterated the need for the Government to bring down the sector’s overall cost burden.
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UKH called for greater stability and fairness in the business energy market, including obligations on suppliers to offer contracts, caps on deposits and an end to hospitality being profiled out of deals, alongside grants or intervention to support businesses leaving fixed‑term contracts.
It also urged ministers to minimise non‑commodity charges on bills, avoid new levies and refer the energy market to the CMA, while also calling for a pause on costly new regulations such as the Deposit Return Scheme, advertising restrictions and mandatory reporting.
Higher costs
In the letter, UKH chief executive Allen Simpson said hospitality businesses were increasingly concerned about the impact of the crisis in the Middle East and how this will affect our already strained sector.
“We have been clear that hospitality is facing three consecutive challenges: the direct costs incurred from higher energy prices, higher costs passed through the supply chain and a customer base that cannot sustain raised prices”, he continued.
“Fixed-term contracts are providing some short-term protection but this will fall away for many in the coming months. Rural venues are already seeing higher prices due to a doubling of the price of heating oil.”
The trade body further stressed cutting VAT for hospitality to 10%, lowering business rates and stopping the holiday tax would be among the most effective measures to support hospitality businesses.
Targeted support
Simpson added: “We are urging Government to urgently pull together, in discussion with industry, targeted measures that support the hospitality sector.
“We hope the situation will improve but Government needs to be in a position to urgently help the sector – due to the fragility of the sector, even before the crisis, caused by substantial cost increases.
“Timely intervention can reduce the risk that viable businesses are lost, preventing lasting consequences for communities across the country.”
This follows operators telling The Morning Advertiser (The MA) last month that energy firms were “getting richer” at the expense of small businesses, as the Middle East crisis and energy bills continued to escalate.
UKH plan in full:
• Energy market stability: an obligation for energy suppliers to offer new contracts, a cap on deposits demanded by suppliers, and the avoidance of sector-specific profiling that has previously seen hospitality locked out of contracts
• Grants or market intervention: fiscal support for businesses coming out of fixed-term contracts
• Relief on non-commodity charges: Government should keep additional costs included within energy bills, outside of unit cost of energy, to an absolute minimum
• No supplement to support other sectors: There should be no additional levies put on hospitality energy bills to fund support for other sectors. The current nuclear levy should be reconsidered
• CMA investigation: The Government should refer the business energy market to the CMA to redress already identified competition issues
• Cut red tape: Costly and burdensome new regulations currently under consultation should be postponed. This includes the Deposit Return Scheme, advertising restrictions and mandatory reporting requirements
