Hospitality businesses in Greater Manchester have not received support with soaring energy bills which was promised by the government last autumn, the city-region’s night time economy adviser Sacha Lord has said.
Mr Lord is calling for an urgent inquiry into why payments have not materialised as worries grow that because of looming financial deadlines many bars, restaurants and similar concerns will miss out on much-needed money altogether. Hospitality business owners across the city-region have spoken out to confirm they have received no help with energy bills during the cost of living crisis, with one restaurant business closing some of its sites temporarily over the winter months to relieve mounting financial pressure.
One large energy provider has already admitted that “systems issues” mean payments have not been made to many of its customers. It comes as continued worries about rising prices and dwindling consumer spending power add to the pressure the sector is feeling.
What has Sacha Lord said about energy support not reaching hospitality businesses?
Mr Lord says operators in the hospitality industry across Greater Manchester have been telling him they have not received any of the energy support they are entitled to which was announced by government as far back as September 2022. As Chancellor Jeremy Hunt has said there will be reductions in support from the end of March, it is now feared that many firms will miss out entirely.
Mr Lord says he is preparing to meet with MPs to discuss the issue and is calling for an urgent inquiry into why payments have been withheld. There are concerns that hospitality businesses will close over next quarter as energy costs continue to go up and Covid loan repayments are due.
Mr Lord said: “Pubs, bars and restaurants have been most damaged by the economic turbulence of the past three years, and support is now being pulled from under businesses that are only just beginning to recover.
“I’m hearing from pubs where monthly energy bills are exceeding rent payments, and others who have temporarily shut sites during the colder winter months to save on gas and electricity costs.
“We also have evidence of energy providers who have either not yet applied any Government support payments to business accounts, or have not applied the full amounts owed, and we are urgently pressing Ofgem and the Government to investigate.
“From the end of March, we will see a hailstorm of damage inflicted on businesses, from the removal of energy support to rises in income tax thresholds, which will further affect consumer spending. Unfortunately, we will see many businesses close down as a result of these extra pressures.
“We are moving from one financial crisis to another, and the Treasury urgently needs to put forward a long term financial plan, which will not only secure economic growth and stabilise the industries currently in peril, but instil confidence in business owners across the UK.”
On Sunday (22 January) EDF, one of the UK’s largest energy providers, admitted to The Times that it has so far failed to pass on emergency government help with bills to about 2,000 small businesses, blaming “systems issues” for the firms not getting the state-funded discount. The Department for Business, Energy and Industrial Strategy (BEIS) has been contacted for comment.
What have hospitality businesses in Greater Manchester said?
The owner of Capuchin Coffee in Altrincham told Mr Lord: “Our business has not had any money put into our business account from the government yet”, while Damien O’Shea, director at Heaton Hops bar in Stockport, said: “We still have not seen any Government support discount applied to our energy bills yet.”
She said: “We have taken the hard decision to hibernate two of our spaces in Ramsbottom for the rest of the winter to cut costs for the immediate future, whilst keeping our original Square Street restaurant open. Unfortunately this has led to two part time job losses and reduced hours for the rest of our team.
“We’ve tried everything possible to avoid this scenario but the overall cost of living and cost of doing business, most seriously the untenable hike in energy prices, have both seriously reduced demand and simultaneously led to huge rises in our costs from every angle.
“We’re just hoping that when we can reopen our outside tables on the street in the spring and that this will boost revenue, but it is going to be very hard to make up the difference in rising energy costs. These are very difficult times.”