Firms call for clarity over energy bill support

Gyms and hospitality firms have said they need to know urgently whether government help for their energy bills will be extended.

Gas and electricity prices have been fixed for firms until March, but it is unclear if the support will continue.

One hospitality group said the sector was "facing a steep cliff-edge" in April if support was not extended.

A decision on the issue had been due before Christmas, but the government postponed it until the new year.

The help for businesses is under review due to the cost, but the delay to the announcement has angered firms and business groups.

Pure Gym, one of the UK's largest gym groups, said energy price increases were "a huge challenge for gyms, putting all operators in our sector under considerable financial pressure".

The firm's chief executive, Humphrey Cobbold, said the industry "desperately" needed "clarity from government" on whether the support, which ran from October, will be extended.

"Each day the decision on future energy support is delayed the more businesses will face permanent closure," he said.

"Those operators with more energy intensive facilities, like pools, spas and saunas facilities, are particularly vulnerable, and sadly it's possible we might see some facilities limit opening hours or have to close their doors permanently unless they receive much-needed support."

The firm has been cutting energy costs by improving control systems, installing LED lighting, and adjusting temperature and air-conditioning settings, he added.

He also said this and previous governments have "failed to put in place the long-term strategy" to bring down bills by not "getting on top" of wind, including onshore wind, and solar energy generation.

• What is the energy price cap and what will happen to bills?
• Decision on energy bill support for businesses postponed

Unlike households, businesses are not covered in normal times by an energy price cap, which limits the amount suppliers can charge per unit of energy.

But after energy prices spiked last year, the government's Energy Bill Relief Scheme fixed costs, providing a lifeline for many firms that risked going bust without the support.

In October, the government said it would review the scheme due to its high cost to taxpayers, with officials considering options to extend support only for "vulnerable businesses".

Industry group UK Hospitality said the government's energy support scheme "had been a lifeline for many hospitality businesses whose bills would have gone up more than threefold had it not been in place".

The group's chief executive, Kate Nicholls, said it was "vital that this support is extended", warning that without that the sector "is facing a steep cliff-edge in April".

"A steep rise in energy costs, coupled with other inflationary pressures, staffing challenges and rail strike disruption, could prove fatal for many," she said.

Ms Nicholls told BBC business editor Simon Jack that the delay to an announcement of the support businesses will receive towards their energy costs, was having "a corrosive effect on business confidence".

The BBC understands that hospitality chiefs are due to meet Chancellor Jeremy Hunt later this week.

Meanwhile, industry group the Federation of Small Businesses (FSB) said small firms "can't plan their 2023 without assurances".

"Our research shows one in four small firms expect to either close, downsize or radically change their business model if the energy support dries up after March," said FSB national chair Martin McTague.

He said a bed and breakfast in the Lake District had decided to close for the winter to bring down energy bills, while a fish and chip shop in the East Midlands risked tax problems if it passes part of its energy costs to customers.

The government has been approached for comment.

Energy prices soared after Russia's war in Ukraine ratcheted up pressure on gas supplies.

Although wholesale gas prices have been falling recently, they are still more than twice as expensive as two years ago.

While businesses are waiting for news on support after March, the government has said already that consumers will continue to get help with energy bills.

Under the current energy price guarantee, which began in October, households using a typical amount of gas and electricity can expect to pay £2,500 annually.

The government has said this guarantee will continue, increasing by £500 to £3,000 for the typical household from April.

Other support is also available for households on lower incomes, pensioners, and for people on certain disability benefits.