The UK government has finally released details of its energy support scheme for businesses but the hospitality industry is still calling for a “more comprehensive package to safeguard businesses and jobs.”
On Wednesday, business secretary Jacob Rees-Mogg, unveiled the package of support on offer, which will be similar to that offered to households.
Key details pf the scheme are:
- It will apply to fixed contracts agreed on or after 1 April 2022, as well as to deemed, variable and flexible tariffs and contracts.
- It will apply to energy usage from 1 October 2022 to 31 March 2023, running for an initial 6-month period for all non-domestic energy users.
- The savings will be first seen in October bills.
- Support (in the form of a p/kWh discount) will automatically be applied to bills.
- Emergency legislation will be introduced when parliament is back from recess in October, which means that discounts will need to be backdated
Good and bad
UKHospitality CEO, Kate Nicholls, said: “We are relieved that the government has listened to the representations that UKHospitality has stridently delivered, relating to the problems that the sector is experiencing with energy suppliers. This intervention is unprecedented and extremely appreciated as we head into an uncertain winter with numerous challenges on many fronts.
However, she added that she was still looking for more support: “The government - and the prime minister herself, in her comments in New York yesterday - has singled out the vulnerability that energy costs are inflicting on the hospitality sector.
“[The] announcement will give businesses some confidence to plan for immediate survival but we will not relent in our pursuit of a more comprehensive package to safeguard businesses and jobs. The levers of reduced VAT and business rates reliefs are still available to the Government, and there must also be a comprehensive package to ensure that there is no cliff edge when these measures fall away."
Long-term issues
One of the big difficulties for the hotel industry in times of uncertainty is pricing and as the scheme is only set to run initially for six months it means deciding on room rates for next spring very difficult. However, Liz Truss, the new UK prime minister said, that there would be longer-term support for more vulnerable industries like pubs.
Guy Adams, who runs the Isle of Barra Beach Hotel in Scotland told the BBC that had been quoted a 377% increase in his energy bills before the cap. Passing on that increase to his customers would have meant increasing the hotel's cheapest room rate of £110 a night to £415.
The hotel actually closes for the winter and won’t reopen until May.
"The fact that it is going to be reviewed in six months is not practical," he said.