Hospitality calls for action against 'profiteering' energy suppliers

Thousands of restaurants, hotels and pubs could go out of business if action is not taken to tackle "profiteering" energy suppliers following a cut in government support, a trade body has warned.

UKHospitality said a snap survey of its members had found almost half (41%) had been refused a quote from an energy supplier because they operated within hospitality.

On 1 April the government's Energy Bill Relief Scheme will end and be replaced by the Energy Bill Discount Scheme, which will reduce the amount of support on bills offered to businesses.

Hospitality operators said they have struggled with "sleepless nights" ahead of the drop in support, while the British Beer & Pub Association (BBPA) warned that average energy bills for a pub after 1 April are expected to increase by £18,400 a year.

UKHospitality said the sector is facing a £7.3b hike in its energy bills from 1 April, with energy costs now accounting for 11.4% of business turnover, up from 3.4% before the crisis.

It has called on energy market watchdog Ofgem to take more decisive action to tackle the problem.

UKHospitality chief executive Kate Nicholls said: "It's clear to everyone that a driver of these rocketing costs has been some suppliers that have seen this crisis as an opportunity to boost their bottom line at the expense of hard-working hospitality venues.

"Ofgem itself has recognised this but has been unable to yet take decisive action. Its current plans to ‘consult on suggested actions' in the summer is not at the speed the sector needs and it needs to move much, much quicker to rein in these suppliers.

"If Ofgem doesn't feel it has the teeth to grip hold of this problem, the government needs to step in immediately to sanction those energy suppliers or immediately give further powers to the regulator."

The drop in energy support comes alongside a 10% rise in the minimum wage on 1 April.

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