Tourism leaders call for clarity on business energy announcement

by | Sep 8, 2022 | News

Tourism leaders call for clarity on business energy announcement

Cumbria Tourism has cautiously welcomed today’s Government announcement that energy bills for businesses will be capped for six months, but further detail is still needed to give tourism operators the certainty they require to plan for the challenging months ahead.

Earlier today Liz Truss announced a six month ‘Energy Price Guarantee’ for businesses to cap the maximum price per kilowatt hour (kWH). There will be a government review after three months to consider potential ongoing focused support for ‘vulnerable industries’ such as hospitality.

Although this is welcome recognition of the need for urgent action on commercial energy that Cumbria Tourism has been calling for, it’s already been confirmed that support for domestic customers will remain in place for two years and Cumbria’s official Destination Management Organisation is calling for more clarity on the long-term support available for businesses.

Gill Haigh, Managing Director of Cumbria Tourism says “We are pleased that the urgent calls for support that we and the industry have been making have been heard and it will be important now that clarity regarding the plan is provided as quickly as possible.

“We’ve seen examples of businesses throughout the county having to consider shutting doors due to staggering renewal prices. After more than two and a half years of hardship recovering from the pandemic, the last thing the industry needed was a staggering jump in electricity prices – given the disproportionately high usage when compared to other industries.

“Hospitality businesses are already feeling the squeeze and are reluctant to pass the prices directly onto their customers who are themselves already facing hardship. Today’s news is a really positive step, but more clarity is still needed.”

As part of its ongoing lobbying, Cumbria Tourism’s specialist research team is currently surveying tourism-related businesses through its new ‘business tracker’ survey to gather first-hand evidence to make Cumbria’s case with national decision-makers.

Meanwhile Chief Executive at Lamont Pridmore, Graham Lamont, has this advice for businesses: “Everyone must still take all possible energy saving measures and review their new energy costs over the winter, including any fixed price deals (which you may have committed to in recent weeks) and compare how the new energy measures affect you. 

“Businesses must do all they can to ensure they remain profitable over the next 12 to 24 months of trading. Your financial forecasts may require you to seek further advice from your accountants to help secure additional bank finance to see you through the next 24 months because of the energy and inflationary pressures affecting your business.”

He adds, “The energy measures are expected to cost up to £150bn in additional Government borrowing which will put pressure on the UK’s international borrowing ability leading to an expected increase in interest rates and the costs of borrowing. It may also result in a lower value of the Pound which will lead to a further increase in the cost of imported goods and more inflationary pressure for UK businesses.”