Don’t Prolong The Business Energy Crisis, Government Urged

As the energy price cap for consumers is revealed today, UKHospitality is sounding the alarm about the perilous situation many businesses still find themselves in

In a letter to Amanda Solloway, the Minister for Energy Consumers and Affordability, UKHospitality urged the Government to deliver on the recommendations in the Ofgem review into the non-domestic energy sector, which aims to clean up the broken business energy market.

Commenting, Kate Nicholls, UKHospitality’s Chief Executive, said the behaviour of some energy suppliers had been ‘scandalous’ and that quickly enacting Ofgem’s recommendations could see businesses exit high-tariff contracts, a move which would help speed up a fall in inflation.

She said: “As consumers rightly see the energy price cap fall again from October, there is a real danger that businesses are being left behind to fend for themselves. Thousands of businesses are locked into contracts fixed at the height of the energy crisis, way above current market rates, and some energy suppliers are simply refusing to renegotiate. This is despite a clear direction from Ofgem to do so.

“It really is scandalous behaviour and is a key reason why inflation continues to remain stubbornly high. What we’re seeing is the cost of doing business becoming too much for venues and they have no choice but to pass these costs on, which drives inflation. Energy, unfortunately, remains the most significant of those high costs.

“The Government now has a clear set of recommendations from its energy regulator – we expect these to be acted upon rapidly. Most important is clear instructions to energy suppliers to renegotiate the highest energy contracts. That is simply the easiest way to relieve the intense pain many hospitality businesses are suffering.

“Speed is of the essence. Those hospitality businesses that have survived so far have seen through almost 18 months of energy pain, but they may not last much longer if Ofgem’s recommendations to rein in energy suppliers are not enacted soon.”

UKHospitality is asking the Government to implement Ofgem’s recommendations in full:

1. Encourage suppliers to resolve issues many businesses are facing with high energy contracts, including direct and immediate communication to suppliers from Ofgem.
2. Offer greater transparency to customers, deliver more timely responses to complaints and drive better practice in setting deemed rates.
3. Deliver wider access to the energy ombudsman.
4. Put in place measures to prevent the blacklisting of entire sectors, particularly hospitality.
5. Improve regulation of energy brokers, including extending protections to more businesses.