Hospitality left out of government’s plan to cut energy prices

The hospitality industry has been left out of the government’s plan to cut energy prices for thousands of businesses. 

Under its industrial strategy for 2025 to 2035, the government has said it plans to reduce the bills of energy-intensive businesses such as advanced manufacturing, clean energy industries and financial services – but not hospitality. Cuts will be funded through reforms to the energy system, not by raising household bills or taxes.

Kate Nicholls, chief executive of UKHospitality, has criticised the announcement, saying it will not deliver growth equally across the UK and that by ignoring 70% of employment it is at odds with the government’s ambition to create jobs and help people into work.

She commented: “Once again, growth will be distributed unevenly and centred around small industrial clusters that have high barriers to access – hardly a recipe for driving social mobility.

“We were desperate to see a plan for hospitality and the high street, which together employs over seven million people. We were disappointed.

“How can national renewal be properly delivered if 70% of the economy is excluded from the government’s flagship plan for growth?

“Critical foundational sectors of the economy, like hospitality, leisure and tourism, are central to creating jobs, yet overlooked. This is the same approach which led to this year’s employer NICs changes hitting part-time, flexible and accessible jobs hardest, while protecting jobs in the industrial strategy.

“The Social Productivity Index clearly demonstrates that hospitality is the top performing sector providing routes into work, regardless of background, education, or upbringing – qualities the government should be backing.

“Instead, this strategy will once again leave behind the towns, coastal communities and rural areas which are most in need of a real strategy for growth.”

Kate believes that lowering energy bills for certain sectors is clear recognition from the government that the energy market is broken and a major barrier to investment, and she has called for a clear roadmap and timeline for when the government will fix the energy market for the rest of the economy.

“The CMA found in 2016 that SMEs were paying 18% too much for energy – an overpayment of £500m per year.” she added. “Nine years on, that has only got worse, and a recent investigation by Ofgem found that hospitality businesses were specifically being treated unfairly, and even blacklisted, by some suppliers.

“Given the government has now accepted that the energy market is a barrier to growth, I hope they move swiftly to resolve the energy challenges that have plagued hospitality businesses for decades.”