'Like sticking a plaster over it': UK club owners sceptical of government's six-month energy cap for businesses

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  • The Energy Bill Relief Scheme, which will cost £60 billion, was confirmed in today's mini-budget.
  • 'Like sticking a plaster over it': UK club owners sceptical of government's six-month energy cap for businesses image
  • The UK government's plan to slash energy bills for businesses–announced in today's mini-budget—has been met with scepticism from club owners and industry campaigners. First outlined on Wednesday, September 21st, the Energy Bill Relief Scheme will fix business energy bills at half their levels—21.1p per kWh for electricity and 7.5p per kWh for gas—for six months from October 1st, 2022. Chancellor Kwasi Kwarteng said the £60-billion package "will stop businesses collapsing, protect jobs and limit inflation." But Michael Kill, CEO of the Night Time Industries Association (NTIA), said this won't help businesses survive winter because network charges and operating costs imposed by energy companies remain uncapped and could mean small businesses still pay more than previous years, "which isn't sustainable." He believes the Energy Bill Relief Scheme should be extended to 12 months and must include business rates relief and cross-board VAT reduction. "We're extremely disappointed with the chancellor's announcement this morning," Kill said. "It will be seen as a missed opportunity to support businesses that have been hardest hit during this crisis, causing considerable anxiety, anger and frustration across the sector as once again they feel that many will have been left out in the cold." Stuart Glenn, cofounder of former London club The Cause, now runs a temporary venue at 60 Dock Road in Canning Town. Speaking to Resident Advisor, he called the six-month relief period "a bit insignificant." He added: "You can't really make a business for six months, you have to plan a bit further. It's like sticking a plaster over it." For Glenn, the process of taking on new spaces has been "pretty daunting" in the face of the energy crisis. "We actually ditched a project to open a small relaxed music pub because the margins were too small–especially in the current climate," he said. However, Glenn believes the more pressing issue is the impending cost-of-living crisis. "Cost of overheads is going up and if people start going out less, you're not making anything," he said. "I'm more concerned about the impact it will have on people going out. Less people coming through the doors mean you're in a really bad situation. If you have the same amount of people going out, you just have to rework your budgets, re-strategise." Nathaniel Williams, who opened Hackney venue Colour Factory in June 2020, feels differently about the relief package. He locked in his energy bills at a fixed rate from the outset of his contract. He welcomes the plan because it also applies to those with ongoing variable rate contracts like his. "These energy caps are great news," he told RA. "They don't go far enough, but it means loads of venues will be saved because they won't have to put their prices up, so they won't lose customers and this will be good for grass-roots venues. Hopefully we'll all get through this." But what will happen in six months time? Rich Whittam, who opened South London venue MOT alongside Jan Mohammed, isn't sure. "Will the energy cap go up in six months time and does it mean we'll be hit with even higher bills? It's just not sustainable," he told RA. "By the time you add cost of rent, staff, PRS–this all adds up. Regardless of how many people we get through the door, we still get charged for these things." He added: "If we don't pull in as many people and don't make much money but still have to pay these overheads, it doesn't put us in a good position. So we need to know what's happening beyond six months." Today's mini-budget also capped average household energy bills at £2,500 annually for two years. The current global energy crisis began during the pandemic and was exacerbated by the Russo-Ukrainian War. In 2021, Russia was the largest supplier of oil and natural gas to Europe. Photo: Dom Martin
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