SLTA warns hospitality needs help amid soaring energy bills

The Ben Nevis pub, Fort William (iStock)

With rising energy and utilities bills and the cost-of-living crisis pushing businesses to the brink, the SLTA (Scottish Licensed Trade Association) is calling for urgent help from the Government given today’s energy price cap announcement by Ofgem.

The new energy price cap will come into force from October 1, meaning that a typical household will be facing bills of about £3,500 – hot on the heels of inflation hitting 10.1 per cent, its highest level for years.

“What is happening domestically affects businesses as people will reduce their outgoings to pay soaring energy bills and hospitality is very much in the firing line,” said Colin Wilkinson, SLTA managing director.

“We’re already hearing of pubs and restaurants now considering closing over the winter period because they are unable to absorb recent sharp increases in energy bills. Already, there are reports of energy prices increasing by 300 per cent and, in one case, just under 500 per cent – and energy providers requiring ‘bonds’ from hospitality owners looking for an alternative supplier.

“Businesses need help and they need it now. There must be an energy cap for businesses, particularly for SMEs, perhaps based on the number of employees. It has also been suggested that the Government should introduce an energy furlough scheme to help businesses through this difficult time – in some ways, the energy crisis is having a more damaging impact on businesses than the pandemic.”

Mr Wilkinson added that the recent interest rate hike, coupled with the energy crisis, could be too much for some SMEs to bear. “Just when the hospitality sector is starting to recover from the pandemic, businesses have yet more costs to absorb. Most are still paying off debts incurred during Covid.

“Businesses have also been affected by the train strikes, many have reduced their opening hours because they can’t get staff and others are having to incur extra costs in finding staff who left the industry during the pandemic and because of Brexit. We’ve definitely reached a tipping point.”

Earlier this month, Mr Wilkinson called for urgent measures to help businesses, particularly SMEs, including a reduction in the rate of VAT and lower business rates. He also called on the next Prime Minister to adopt a “business first” agenda in order to protect businesses and jobs and stimulate economic growth.

“It’s no exaggeration to say that many people are facing a winter of discontent as they tighten their belts and reduce their outgoings – and it’s no different for businesses which must also find ways to save money without putting up their prices.”