Tourism leaders call on new PM to take urgent action to safeguard businesses

by | Aug 31, 2022 | News

Tourism leaders call for clarity on business energy announcement

With the new Prime Minister set to be confirmed next week, Cumbria’s Tourism leaders are calling for them to urgently address spiralling energy costs with concrete support for businesses facing uncapped bills this winter.

The Destination Management Organisation representing one of the UK’s best-known visitor destinations has been inundated with questions and concerns from tourism operators in recent days, highlighting the scale and breadth of the challenges they are facing over the coming months.

Cumbria Tourism says lobbying the new PM on the urgent issues facing the visitor economy will be a top priority, and its key asks for Liz Truss or Rishi Sunak will be to:

  1. Introduce an energy price cap for businesses
  2. Introduce an emergency VAT reduction
  3. Provide assistance for people who live in their business property, such as family-owned B&Bs, and currently pay residential council tax on top of business rates.

Cumbria Tourism’s specialist research team is also surveying tourism-related businesses through its new ‘business tracker’ survey to gather first-hand, up-to-date evidence to make Cumbria’s case with national decision-makers including the new Prime Minister, as well as industry bodies such as UK Hospitality and The Tourism Alliance.

Meanwhile, the organisation is urging operators to write directly to their local MPs to raise their concerns and amplify the message.

Managing Director of Cumbria Tourism, Gill Haigh, says, “As business energy prices aren’t currently capped in the same way as domestic prices, there is real alarm among tourism businesses about what the winter months will hold. During Covid the Government provided critical support and whoever takes charge as the new Prime Minister needs to take immediate action to avoid potentially catastrophic consequences for the visitor economy.

“Energy use is already the second highest cost after wages for most tourism and hospitality businesses – disproportionately high in comparison to small businesses in many other industry sectors. As we go into the traditionally quieter winter season, these operators are dealing not only with rocketing costs across the board, but also ongoing recruitment challenges, a fragile supply chain and falling consumer spend.

“If tourism and hospitality businesses have to close for winter, this will devastate Cumbria’s visitor economy and it will have knock-on effects on our economy for years to come. These issues cannot wait!”

Alan and Cheryl Leyland have operated Manesty Holiday Cottages – a small self-catering accommodation business in the Borrowdale Valley near Keswick – for the past 40 years.

Alan comments, “For the past months we have watched prices for renewals rise from 30p per kwh to 60p and more.  This week we signed up for prices well over 60p only to be told the next day that one of the two energy companies concerned had turned down the contracts and the second one had not confirmed either. 

“We were then informed by our energy broker that all suppliers had pulled their offers from their websites and that nothing could be done; that means we will revert to an emergency tariff from 7 November, perhaps as much as 50% over the ruling market rates at the time. The end result is that we cannot take advance booking for 2023 when one of our principal costs is completely unknown.”  

Meanwhile, Mark Vause owns 1863 Restaurant with Rooms on Ullswater, along with his wife Anne. He says, “Our current deal is at an average of 14p per KWH, giving us a bill of around £13,500 per year including VAT and Climate Levy. Our best new quote is at an average of 75p KWh giving us a bill of around £67,000 inc VAT and Climate Levy.

“Hospitality has a high percentage use of energy in comparison to most other small business and this scenario will be echoed around every hospitality business in the land leading to closures, lack of facilities and unemployment.”

Tourism-related businesses are being urged to complete Cumbria Tourism’s survey now and make their voices heard: