Pubs and restaurants are facing “widespread business failure” in the absence of government support as energy bills swell, hospitality chiefs have said.
In a letter to ministers, UKHospitality has warned that tens of thousands of jobs could be lost as the UK enters the colder months, as businesses are hit with increasing headwinds.
Writing to Chancellor Nadhim Zahawi and business secretary Kwasi Kwarteng, UKHospitality chief executive Kate Nicholls said there was a danger of “persistent scarring to high streets and damaged social mobility.”
“Hospitality businesses are facing a crisis this winter, with soaring costs combined with a sharp drop in disposable incomes for our customers,” she added.
Calls from the sector include for a business rates freeze for hospitality firms and a reintroduction of a trade credit insurance scheme for energy.
Industry chiefs have also urged the government to reconsider reversing April’s move to hike VAT for hospitality businesses from 12.5 per cent back to 20 per cent.
A flash survey by the British Institute of Innkeeping (BII) found that 90 per cent of publicans who have been quoted for new energy contracts will face prices at least doubling from the price they are paying now.
Soaring bills mean that one in two pub businesses will now be loss making, with one in three predicted to fail in the next three months, according to the trade body.
“We have been sharing the data from our members with officials and ministers in government for many months now, leaving them in no doubt of the impact of increasing pressures of cost of business inflation and specifically the escalating energy crisis,” the BII’s CEO Steve Alton explained.
There was a “devastating” reality for individual pub operators “behind these stark headlines,” he added.
“The effect of these unprecedented energy price rises on our nations’ pubs has now reached a critical level.”
Bosses of six of the UK’s biggest pub and brewing companies also signed an open letter to the government urging it to act in order to avoid “real and serious irreversible” damage to the sector.
Greene King, JW Lees, Carlsberg Marston’s, Admiral Taverns, Drake & Morgan and St Austell Brewery all sounded the alarm on Tuesday.