Tue 20th Sep 2022 - Sector demands urgent clarity on energy cap and need for wider government support to avoid ‘unfolding catastrophe’ on industry Sector demands urgent clarity on energy cap and need for wider government support to avoid ‘unfolding catastrophe’ on industry: Sector trade bodies have demanded the government gives urgent clarity on the energy cap for businesses as well as wider support and a long-term plan to secure the future of the industry and save businesses and jobs across the UK. In a letter to chancellor Kwasi Kwarteng, they warned business owners were making decisions now about whether they could survive the winter, and simply could not wait any longer to understand whether they should sign new contracts or not. The letter – from UKHospitality, British Beer & Pub Association, British Institute of Innkeeping, Hospitality Ulster, the Society of Independent Brewers, Independent Family Brewers of Britain, Campaign for Real Ale and Pub is the Hub – came after Downing Street said information on energy support for businesses would be announced in this week’s fiscal statement, but payments might need to be backdated to October. They have also urged the government to think beyond the next six months, noting that “while the energy cap will be a critical lifeline and stem the situation over the next six months, more is needed to ensure businesses can head into winter knowing they have the chance to not only survive but thrive again”. They called on the chancellor to avoid an “unfolding catastrophe” by bringing forward the following measures to support the industry both now and in the longer-term: an immediate reduction on VAT on all food and drink sales across hospitality; cancellation of business rates for the remainder of this fiscal year for all hospitality businesses regardless of size; and the need for the regulatory burden placed on the sector to be eased, noting how upcoming alcohol duty and business rates reform had the potential to further reduce taxes on an already fragile sector. Industry leaders stated: “An energy price guarantee for business will provide some short-term relief for businesses on the brink of closure, but more support is needed, as well as a plan beyond the next six months. The initial announcement helped businesses breathe an initial sigh of relief, but most are still in the dark as to how the guarantee might help them. Our industry is one of only a few that supports jobs and livelihoods in every single part of the UK, and we have the potential to deliver growth in every single community we serve, but we’re being held back. We need policies that ensure our survival through the winter which will allow us to invest in the long-term potential of our sector, action on the tax burdens that are stunting our growth and a government that understands the extremely critical situation we’re currently in.” Propel reported earlier today that Kwarteng is considering a blanket discount on business energy bills ahead of delivering this week’s mini-Budget. Ministers are understood to be examining a potential scheme in which companies will get a fixed reduction to the rate they currently pay per kilowatt hour on their bills, in contrast to the mechanism to be used for households, where the maximum that energy companies can charge is capped. A discount is believed to be seen by Number 11 as the simplest and most effective way of delivering support, but is just one of several options being looked at.