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Firms call for clarity over energy bill support

Gyms and hospitality businesses have said they urgently need to know if government help for their energy bills will be extended.

Gas and electricity prices were set for businesses through March, but it’s unclear if support will continue.

A hospitality group said the sector faces “a steep cliff” in April if support is not extended.

A decision on the matter was due before Christmas but was postponed by the government until the new year.

Aid to businesses is under review because of the cost, but the delay in announcing it has angered businesses and business groups.

Pure Gym, one of the UK’s largest gym groups, said energy price hikes are “a major challenge for gyms, putting all operators in our sector under significant financial pressure”.

The firm’s chief executive, Humphrey Cobbold, said the industry “urgently” needs “clarity from government” on whether support, which ran from October, would be extended.

“Every day the decision on future energy support is delayed as more businesses are forced to close permanently,” he said.

“Operators with more energy-intensive facilities such as swimming pools, spas and saunas are particularly at risk, and unfortunately it’s possible that some facilities may have to limit hours or close their doors permanently if they don’t receive much-needed support.”

The company has reduced energy costs by improving control systems, installing LED lighting and adjusting temperature and air conditioning settings, he added.

He also said that this and previous governments “have failed to implement the long-term strategy” to bring down bills by not “getting a handle on” wind, including onshore wind, and solar power generation.

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Unlike households, commercial businesses are not subject to an energy price cap during normal times, which limits the amount that utilities can charge per unit of energy.

But after energy prices soared last year, the government’s Energy Bill Relief Scheme fixed the costs and offered a lifeline to many companies that were at risk of going bust without the support.

In October, the government said it would review the program because of the high cost to taxpayers, with officials considering options to extend support only to “vulnerable businesses”.

Industry group UK Hospitality said the government’s energy support scheme had been “a lifeline for many hospitality businesses whose bills would have more than tripled had it not been for it”.

The group’s chief executive, Kate Nicholls, said it was “vital that this support is extended” and warned that the sector “faces a steep cliff in April”.

“A precipitous rise in energy costs, coupled with other inflationary pressures, staffing problems and disruption from the rail strike, could prove fatal for many,” she said.

Meanwhile, industry group Federation of Small Businesses (FSB) said small businesses “can’t plan for 2023 without assurances.”

“Our research shows that one in four small businesses expects to either close, downsize or radically change their business model if energy support dries up after March,” said FSB national chair Martin McTague.

He said a Lake District bed and breakfast had decided to close for the winter to cut energy bills, while an East Midlands fish and chip shop risked tax problems if it passed some of its energy costs on to customers.

The government has been asked for comment.

Energy prices rose sharply after Russia’s war in Ukraine increased pressure on gas supplies.

Although wholesale gas prices have fallen recently, they are still more than double what they were two years ago.

While businesses await news of support after March, the government has already said consumers will continue to get help with energy bills.

Under the current Energy Price Guarantee, which started in October, households using a typical amount of gas and electricity can expect to be paid £2,500 a year.

The Government has announced that this guarantee will continue and be increased by £500 to £3,000 for the typical household from April.

Other support is also available for lower-income households, pensioners and those on certain disability benefits.