Small businesses hit with bills in the thousands and face closure as spiralling energy costs hit

30 August 2022, 12:35

Small businesses across the UK have shared how they are struggling to cope as they face imminent closure after being hit by spiralling energy costs.

People across the country have been sharing their stories online as crippling bills force them to close their doors for good.

Despite fighting through the pandemic, several small firms have said the jump in energy costs is set to be the final straw for them.

One cafe in Leicester saw their electricity bills go from £10,000 a year to £55,000 - leaving them few other options moving forward.

Sasha Lord issues stark warning on future of British hospitality

A book shop in Wales is also fighting to keep its doors open, having just about secured a deal to fix bills amid the spiralling costs.

The owner explained to LBC that to pay their electricity bill this month the business would need to sell 211 £8.99 paperbacks - nearly £2,000 worth.

She said they were "scared" of what the future holds if the Government does not take action through winter.

She later added: "I'm raging, I have worked so bloody hard for the past 2 years, got through Covid, rescued the business from threat of closure when the building went up for sale, kept every job, worked through illness and jeopardised my own mental health so the government could screw us all.

"Please find me one person in power that cares and is prepared to do something about this."

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Another person revealed their local takeaway closed immediately after receiving their energy bills.

Speaking to LBC, Night Time Economy Adviser for Greater Manchester Sasha Lord said seven out of 10 pubs will not make the winter.

"The fear, the anxiety, the stress that is running across the whole of the UK - we are the fifth biggest industry - and we are in a far worse position that we were during the pandemic. At least there was some support there.

"We're just freewheeling into a cliff edge."

He suggested three things needed to be done: a VAT reduction, energy rebates and lowered restrictions on visas to get people back into the country filling essential jobs.

Mr Lord added: "Seven out of 10 pubs will not make the winter if nothing is done.

"We are known for the pub – let's not trivialise fish and chips – we're known for fish and chips but at the moment the oil in the fat fryer is more expensive than unleaded petrol. It is an untenable situation."

Chief operating officer of St Austell Brewery Andrew Turner echoed a similar sentiment, warning small businesses are facing a crisis with soaring energy prices driving up operating costs and making it impossible for some owners to make a profit.

"Unlike consumers, there is no energy price cap for small businesses therefore we are seeing spiralling costs for our tenants, pubs, and breweries," Mr Turner told Sky News.

"It is totally wiping out the profits they are making, which questions why on earth they would want to open their doors going forward."

Mr Turner said that he had heard from one tenant who saw their energy bills increase by more than 400% last week.

Without any small business alternative to the consumer price cap, operators could face runaway energy costs as the price of gas continues to surge.

Mr Turner said that to avoid a potentially "catastrophic" situation, the Government needs to provide greater leadership and more support for the struggling sector.

"At the moment, it feels like we are sat in the ether, with no significant leader at the top to make decisions" he added.

"We need the Government to step forward to make decisions, to support our sector, and make sure such a cornerstone of UK business can get through this tough time."

Meanwhile, the bosses of six of the UK's biggest pub and brewing companies have signed an open letter to the Government urging it to act in order to avoid "real and serious irreversible" damage to the sector.

St Austell Brewery along with Greene King, JW Lees, Carlsberg Marston's, Admiral Taverns and Drake & Morgan all sent the urgent warning.

A Government spokesperson said on Tuesday: "No government can control the global factors pushing up the price of energy and other business costs, but we will continue to support the hospitality sector in navigating the months ahead."