Energy crisis: Hospitality snubbed with six months of support

The UK's new Prime Minister Liz Truss has delivered the government's energy announcement to the House of Commons, leaving hospitality venues guessing as to what their future holds. 

Aimed at supporting households and businesses as they face crippling energy prices, Truss announced an annual £2,500 cap for households over the next two years, with businesses only seeing their energy costs capped at the same price for the next six months. 

"We will also support all businesses, charities and public sector organisations with their energy costs this winter, offering the equivalent guarantee for six months," said the PM. "After those six months, we will provide further support to vulnerable sectors such as hospitality..." 

Just this morning, a survey by industry body UKHospitality revealed average energy increases of 238% for the hospitality sector, with three in five operators fearing their business may not survive the crisis.  

Industry reaction

Kate Nicholls, CEO of UKHospitality, has responded to today's announcement on social media, praising the PM's "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 & effective cash injection".

But, adds Nicholls, "businesses cannot wait for 3 months to find out what support is planned nor can they wait until the end of the price freeze to receive it".  The CEO warns that, without urgent details from the government on who and how the sector will be targeted, many hospitality businesses "will be forced to take difficult decisions".

In her official statement, Nicholls adds: "While the welcome energy price freeze will ease the pressure on our customers and colleagues, high bills will still constrain spending in the sector and operators themselves will still have to fund energy bills and other rising costs. For many hospitality businesses, this will prove too much to bear and hundreds of community assets will be shut and jobs lost unless additional support is brisk and bold."

Other announcements

The maximum amount for an average household's evergy consumption had previously been due to rise to over £3,500 next month, with some projections showing that bills would subsequently reach over £6,000 in 2023. With the £400 grant and temporary removal of £150 green levies, average household bills would approximately remain at their current level of £1,971.

While the freeze on household bills was reiterated in today's announcement, Ms Truss rejected the idea of using windfall tax on oil and gas companies' profits to support the package – reported to cost up to £150bn. Experts predict that the Treasury will finance the scheme through government borrowing rather than state-backed loans.

Image: Number 10, Flickr

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