The chairs of Parliament’s Treasury and business select committees are being called upon to conduct an urgent inquiry into reports of poor conduct from energy suppliers in relation to the licensed trade.
The British Beer and Pub Association (BBPA) has today written to Harriett Baldwin MP and Darren Jones MP, chairs of the respective committees, to urge them to convene an immediate inquiry into the energy sector and potential instances of profiteering.
Introduced in October, the government’s Energy Bill Relief Scheme was intended to bring down energy costs for millions of businesses, but it has had little positive impact for the brewing and pub sector.
The trade body is reporting countless examples of price hikes and poor practice, which, in many cases, have meant the impact of government support is effectively nil. This has led to suspicions of profiteering on the back of taxpayers’ money.
Reports from publicans and brewers cite sharp increases in non-energy costs being layered onto bills, harsh new terms and conditions, requirements for enormous upfront security deposits, and even refusing to contract with hospitality businesses at all.
The BBPA has written to the energy regulator Ofgem, which is investigating the claims, but says there is a need for action immediately to prevent what is already becoming the number one cause of business failure in the sector.
The BBPA is calling on MPs in Westminster to demand an explanation from energy suppliers for the current state of the market. It says it is also essential that the recent reduction in wholesale prices is reflected in energy bills quickly.
“The spiralling cost of energy has been our members’ number one concern for close to a year now, and remains so,” said BBPA chief executive, Emma McClarkin.
“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.
“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.”
CAMRA backed up the BBPA’s call, with chair Nik Antona adding: “Given that many businesses haven’t had the reduced energy costs they were expecting as a result of this behaviour by energy companies, CAMRA is urging the chancellor to use his Budget in March to announce more support with energy bills to help save the UK’s world-renowned pubs and breweries.
“The chancellor also needs to cut duty on beer and cider served in pubs by 20% and make the business rates system fairer if our locals are to survive this cost-of-doing-business crisis.”
In an article for The House website yesterday, Baroness Twycross said: “A u-turn on support for the sector in relation to energy bills and a retention of a permanent lower rate of 12.5% VAT would be welcome.
“But either way, the government’s 2021 Hospitality Strategy now looks lacking in its understanding of the threats to the sector, and an urgent rethink is required if the then business secretary’s remarks about “the social value of our hospitality businesses” is not to be lost. Her full article can be read here.
Case study: The York. Morecambe
“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,” said licensee Gemma Gardener.
“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.
“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.”