Scots Hospitality Businesses Warn Energy Bill Relief Scheme ‘Goes No Way Near Enough’

The SLTA (Scottish Licensed Trade Association), while welcoming this week’s news that wholesale energy prices for businesses are to be capped, has warned that it “goes no way near enough and more needs to be done to help the struggling hospitality sector through the winter months”.

Commenting on the new Energy Bill Relief Scheme which will fix gas and electricity prices for all companies for six months from October 1, SLTA managing director Colin Wilkinson said: “This is news that we have been waiting for and obviously we welcome it but when you look beyond the headlines it doesn’t live up to the hype as this new scheme caps the wholesale price and pubs and bars could still be paying 200-300% higher bills than normal.

“There are pubs and bars currently on a rate of 90p per kWh, in comparison to 15p in normal times. The Government says that the current wholesale price of gas is about 42p per unit therefore businesses should see a reduction of 21p in their unit price but this still means much higher bills than before the energy crisis.

“Nothing in the plan tackles the problems of large deposits and bonds, particularly for the SME independent sector, nor restricts the additional margins made by the energy suppliers.

“The SLTA is concerned this may not be the lifeline we were all hoping for and today’s announcement is not enough. More needs to be done to help the struggling hospitality sector through the winter months.”

Under the scheme announced by the Department for Business, Energy and Industry, wholesale prices are expected to be fixed for all non-domestic energy customers at £211 per mWh for electricity and £75 per mWh for gas for six months.

Mr Wilkinson said: “We understand that it will take some time for full details to be made clear but our point, and one that is shared by many other business groups, is that businesses will still be expected to pay grossly inflated energy bills which many just cannot afford.

“It is clear to us that more help is required and urgently if we are to stave off business closures in the coming months.”

The SLTA has previously called for business rates relief and a reduction in VAT for hospitality businesses.

“We already know that some pubs and restaurants are considering closing over the winter period because they are unable to absorb recent sharp increases in energy bills at a time when they are recovering from the pandemic and paying off debts incurred during Covid.

“Many are at breaking point and we now hope for some good news for businesses in new Chancellor Kwasi Kwarteng’s min-Budget on Friday.”