In a letter written yesterday (Tuesday 24 January) to Harriett Baldwin MP and Darren Jones, Chairs of the Treasury and Business Select Committee respectively, the hospitality trade body implored for an immediate inquiry into the energy sector and “potential instances of profiteering” to be convened.
BBPA chief executive Emma McClarkin said: “The spiralling cost of energy has been our members’ number one concern for close to a year now and remains so. Now, multiple reports of poor practice have compelled us to speak up on behalf of suffering businesses and make this urgent call.
“There is no doubt that this is causing businesses to fail – people simply cannot afford to make ends meet and are left with no choice but to shut up shop meaning a community loses its pub or brewery, and the jobs and livelihoods that go with it, for good.”
Poor practice
Introduced in October, the Government’s Energy Bill Relief Scheme, which was recently replaced with the Energy Bill Discount Scheme, was intended to bring down energy costs for businesses.
However, the BBPA has reported “countless” examples of price hikes and “poor practice” from suppliers, which in many cases counteracted the impact of the support, leading to “suspicions of profiteering on the back of taxpayers’ money”.
Examples of reports from publicans and brewers included increases in non-energy costs, “harsh” new terms and conditions, requirements for “enormous” up-front security deposits as well as some instances of contract refusals for hospitality businesses.
Licensee of the York pub in Morecambe, Gemma Gardener, said: “Not only have our energy bills been extortionate, but our supplier has also added on extra unexpected charges outside of our standard rates, from a £2k installation fee to doubling our daily hire charge unexpectedly.
“We have tried to switch suppliers but been rejected, and the only reason we’re able to keep going is because our pub company is helping us through. We’re struggling with our bills but so are our customers and so we’re being squeezed at both ends.
Incredibly scary
“Not knowing what we’ll be charged month on month is incredibly scary, this isn’t only our business but our home and we’re at the mercy of our energy suppliers.”
The BBPA has called on MPs to “demand” an explanation from energy suppliers for the current state of the market and claimed it is “essential” for recent reductions in wholesale prices are quickly reflected in energy bills.
Additionally, the trade body has also written to energy regulator Ofgem, which, according to the BBPA, is investigating the claims and that there was a need for immediate action to prevent what is already becoming the “number one” cause of business failure in the sector.
This follows recent calls from night-time economy adviser for Greater Manchester Sacha Lord for an investigation into why energy support for businesses has been withheld.
McClarkin added: “The Government put this support measure in place to stop this very thing from happening, but the energy suppliers just don’t seem to be playing fair. The damage being wrought on our sector is enormous and I hope that MPs will heed this call and investigate the issues fully.”
