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UK night-time and hospitality sectors call for urgent action over surging energy costs

By | Published on Monday 15 August 2022

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As the live entertainment, night-time and hospitality industries in the UK attempt to recover from all the shutdowns and restrictions that occurred during the COVID pandemic, surging energy prices are now creating a “matter of existential emergency” for businesses in those sectors. Or so say five organisations that together represent venues, clubs, pubs, bars, hotels, restaurants, and other night-time and hospitality businesses.

The Night-Time Industries Association, Music Venue Trust, British Institute Of Innkeeping, British Beer And Pub Association and UK Hospitality have penned an open letter to the UK government explaining that urgent support is needed as the entertainment, night-time and hospitality industries tackle the current surge in energy prices, on top of all the other challenges created by the COVID shutdowns and cost of living crisis.

They write: “Pubs, restaurants, music venues, nightclubs, hotels and wider hospitality have reached the point where the conditions for trading are so prohibitive that many venues are already reducing the hours they open their doors. Others are confronted with the threat of permanent closure. With chronic challenges in the supply chain, labour shortages, interest rates and inflation, rocketing energy prices have become a matter of existential emergency for businesses in our sector”.

“Hospitality operators face average annual bill increases in the region of at least 300%, putting at risk businesses and jobs”, they go on. “It is also increasingly clear that a significant number of energy providers have withdrawn service provision from the hospitality market altogether”.

“The primary purpose of a free market for energy supply to businesses is to create competition, which leads to improved services, competitive rates, resilient suppliers, and the ability to invest in long term and sustainable solutions to energy demand”, they continue. “In the hospitality sector, there is unequivocal evidence that this primary purpose is failing”.

“On Friday”, they note, “the government saw fit to declare a drought, in the face of inarguable evidence that weather conditions had caused a threat to the nation. The energy crisis is no less of a threat and deserves similar attention. Not all businesses will be able to survive this onslaught, and those that can will be closely considering how they can keep their costs down just to stay afloat”.

The letter then concludes: “Hospitality provides 10% of jobs and 5% of GDP. It can be a powerful driver of economic recovery and growth for the nation, but it urgently needs a kick start. Business and consumer confidence is suffering, and we urgently need the government and the leadership contenders to outline a support package for the sector. We urge you not to allow the stasis of party politics to stifle the urgent delivery of action on energy”.

That ‘political stasis’ is key here, of course. Because it pretty much feels like the UK has no functioning government just now, following the entirely predictable and long-drawn-out downfall of the big old Bullshitter In Chief – ‘Boris’ Johnson – and the current tedious bid by both Rishi Sunak and Liz Truss to succeed him as UK Prime Minister.

While the Conservative Party focuses on debating all the many, many problems created by the last twelve years of Conservative government in the UK – and which member of that party and government is best positioned to fix the fuckery and quell the shitstorm – it’s hard for businesses, not to mention individuals, to know where to go to lobby for urgent action and support in relation to the most pressing matters.

Optimists might be hoping that the once the new PM is appointed at least some action will be taken in relation to things like the energy crisis – such action currently being delayed either because Johnson’s on-its-way-out limbo government is a particularly lame political duck, or because the Conservative Party top guard want some easy-wins for the new PM once in office, or both. But even for the optimists, that waiting game could in itself prove fatal.

Stressing the need for urgent government intervention on the energy price surge in particular, NTIA boss Michael Kill said this morning: “The government cannot continue to understate the escalating crisis within the energy sector, the contraction of energy suppliers is compromising the free markets primary purpose of generating competitive rates and service levels”.

“Limited competition has resulted in energy tariffs that are already unsustainable”, he went on, “and without the government’s intervention, businesses who have survived the pandemic, supported by public funding, will face further uncertainty, and in many cases, permanent closure”.

And MVT CEO Mark Davyd added: “After two incredibly difficult years where venues have had to fight for simple survival, it would be an extraordinary outcome to see them closed and permanently lost because of an energy market that is completely out of control and not fit for purpose. The government must act to create a genuinely functioning market for energy services that can deliver supply at a reasonable cost or step in to create an affordable supply for businesses”.