New Prime Minister Liz Truss has revealed a six-month programme of support for businesses struggling to pay their energy bills and under threat of closure.
The scheme for businesses and non-domestic users will prevent businesses, particularly the hospitality sector from facing rises in their energy bills of as much as 600pc.
Ministers have not yet provided a figure of how much the support will be worth, but said it will be “equivalent” to what is being provided to consumers.
After the initial six-month scheme, targeted support will be provided to the most vulnerable businesses, such as restaurants and pubs. This will be reviewed after three months.
Ms Truss said the business secretary will work with businesses on a review to determine where this will be targeted to ensure those “most in need” get support. She said the review would be completed within three months.
UKHospitality chief executive Kate Nicholls tweeted that it was a “positive plan” to start tackling price rises but said businesses could not wait for three months to find out if further support was available.
Nicholls wrote: “Positive plan to start tackling cost of doing business and energy crisis. Really welcome recognition of need for immediate action on commercial energy bills and further support needed to industries like hospitality most at risk – VAT and rate relief quick and effective cash injection.
“But, businesses cannot wait for three months to find out what support is planned nor can they wait until the end of the price freeze to receive it – without urgent details who and how it will be targeted, many hospitality biz will be forced to take difficult decisions.
“We look forward to working closely with the new business secretary on plans to support hospitality recovery to give businesses headroom to survive, return to growth and positive contribution in so many local communities.”
Steve Alton, CEO of the British Institute of Innkeeping (BII) commented:
“We have left Government in no doubt about the crushing impact of energy costs on our members’ pub businesses and we are pleased that this has been specifically recognised in today’s announcement. Beyond the impact of energy, pubs across the nation have seen their long hoped for recovery stopped in its tracks by chronic staff shortages, repaying pandemic specific debts, a crippling rise in the cost of doing business through inflationary rises and a squeeze on consumer spending, with many pubs already loss making.
“Escalating energy costs have rendered long-standing essential local businesses simply unviable. We await the detail on how this price guarantee will be applied for our nations’ pubs and the impact that this will have on their survival. Today’s announcement looks to tackle the specific energy issue and we look forward to again working closely with Government to urgently deliver the wider package of investment that will be needed to allow our members to trade through these exceptional challenges and be at the heart of growth in our economy.”
Earlier today almost 300 hospitality companies wrote to the government calling for more support including a cut in VAT and a freeze in business rates. https://catererlicensee.com/1-in-5-hospitality-businesses-wont-survive-without-support/