Analysis by the Liberal Democrats has found that Ondon hospitality businesses face the prospect of an increase in annual energy bills of around £4,500 once government support is reduced.
Earlier this month the government confirmed the current rate of support for businesses, which was introduced in September, will be reduced in aprilwith new discount scheme To replace it by March 31 next year.
Industry experts have warned that rising costs could see many establishments closing their doors for good, with energy bills the biggest threat to pubs and breweries.
Businesses in the city will be worst hit with 260 pubs, restaurants and cafes each facing an average bill increase of £5,278 a year.
A total of 130 “micro-businesses” in the area – with up to nine employees – could each see their bills increase by an average of £3,889.
Small businesses with up to 49 workers, of whom 95 in the City of London, can be set back £5,557 a year.
Medium businesses with up to 249 workers in the area – including 20 licensed restaurants, five unlicensed and 10 pubs or bars – are facing a £9,677 increase.
The City of London is followed by Westminster, where around 1,500 businesses will see an average increase of £5,172.
Barking and Dagenham will see the lowest increase in bills, although local businesses there still face an unprecedented increase of £4,028.
Kate Nicholls, CEO of UKHospitality, said: “The Government’s energy support scheme was a lifeline for many hospitality businesses – without it bills would have risen by more than 400 per cent to date.
“Businesses will be forced to close their doors, jobs will be lost and communities will be deprived of hubs that have become lifelines.
“If we have to avoid this, the industry needs to see action now. Hospitality should be included in the government’s list of energy and trade intensive industries and we need to see an increase in the extent of business rates relief.
“Without such measures, April would indeed prove to be the cruelest month for hospitality.”
The data comes just days after Bar Group Revolution announced it would shut down Mondays and Tuesdays in January and early February due to rocketing energy costs.
Just before Christmas it was revealed around 400 pubs are set to close their doors in 2022, citing rocket energy bills and pressure from staff.
The government initially capped business energy costs, but from April they are replacing that scheme and will instead pay a small part of the increased costs for businesses.
It means many pubs, cafes and restaurants will see a 90 per cent cut in help from the government, the Liberal Democrats claim.
Sarah Olney, Treasury spokeswoman and MP for Richmond Park, said: “London hospitality businesses are facing a cliff edge this year. Our pubs, restaurants and cafes have already endured a lot, our local streets People will be devastated to see more damage.
“The government not only needs to give businesses in the capital the support they need to endure this energy bill disaster.
“Ministers in Westminster must not wait a moment longer. The Liberal Democrats are calling on them to intervene and think again about this change – if they don’t we will see thousands of businesses including pubs, restaurants and cafes closing can see happen. It can tear the heart out of our communities.”
The Treasury said it had provided an “unprecedented” £18 billion package throughout the winter, but this was only temporary.
Under the Energy Bill Relief Scheme, the government supported businesses and public sector organizations such as schools and hospitals by providing rebates on wholesale gas and electricity prices.
“The government is clear that the current levels of support were time-limited and intended as a bridge to allow businesses to adapt,” the Department for Business, Energy and Industrial Strategy (BEIS) said on its website.
“Wholesale gas prices have now fallen to levels just before Putin’s invasion of Ukraine and have nearly halved since the current plan was announced.
“The Energy Bill Rebate Scheme (EBDS) therefore balances between supporting businesses over the next 12 months and limits taxpayer exposure to volatile energy markets, with a cap of £5.5 billion based on estimated volume.”
EBDS will run for 12 months from April 1 to March 31, 2024.
As per the current plan, the government will provide a rebate on the unit prices of gas and electricity to businesses. But establishments will receive a per-unit rebate on energy bills, with a maximum rebate capped at £19.61 per MWh for electricity and £6.97 per MWh for gas.
Suppliers will automatically apply the reduction to the bills of all eligible non-domestic customers.
Average bill increase for businesses by local authority
Barking and Dagenham: £4,028
Kingston upon Thames: £4,394
City of London: £5,278
Richmond upon Thames: £4,326
Waltham Forest: £4,112
Hammersmith & Fulham: £4,448
Kensington and Chelsea: £4,810
Tower Hamlets: £4,497
(tags to translate) energy bill