Industry News

Industry bodies react to scrapping of business energy price cap

Featured image credit: Kilyan Sockalingum on Unsplash

Industry organisations have reacted to the plans set out by the UK Government to help businesses deal with the inflated energy costs. 

The government is scrapping the energy price cap for businesses from April 2023 and is instead replacing it with a discount. The new plans will see eligible businesses in the UK receive a discount on high energy bills until March 2024.

However, Society of London Theatre (SOLT) and UK Theatre have said they are “disappointed” by the announcement, as venues and theatres will lose “vital support in a challenging market”.

The theatre organisations highlighted that some theatre businesses were faced with energy quotes in excess of 500% over their previous contract rate in autumn last year. They said that businesses will most likely face similar situations without the energy cap.

SOLT member, David Hutchinson, chief executive of theatre production company Selladoor Worldwide, said: “The reversal of the cap on business energy prices is a hammer blow to the theatre sector, which has only just reopened and is rebuilding audience, product and commerce after years of closure.

“The industry is suffering already from considerably higher commodity costs, labour shortages and cost of sale to reach audiences. We cannot pass on this cost to the consumer, who is already struggling with the cost of living.

“This puts the theatre sector in a crisis as costs across the board increase, yet revenue remains stable. The government needs to come up with more ideas to protect buildings, keeping the lights on, and businesses across the country viable – and this move has done nothing but add further pressure on a very difficult situation.”

SOLT and UK Theatre noted that for every £1 spent on a theatre ticket, additional spend is generated outside the venue in local economies, accumulating in £1.94bn (€2.2bn/$2.4bn) per annum of extra value.

“Ongoing energy bill support from the government would have enabled theatres to continue to deliver this economic benefit at a greater level and to provide vital services for their local communities, including acting as warm banks. However, it is now likely that some of these services will need to be scaled back to meet rising costs,” said the statement.

SOLT and UK Theatre added that they will continue to work with colleagues in HM Treasury, the Department for Business, Energy and Industrial Strategy (BEIS) and the Department for Digital, Culture, Media and Sport (DCMS) to highlight the impact of the decision on the sector.

The Night Time Industries Association (NTIA) has also highlighted the potential negative impact on businesses in the night time economy.

“Even under the current relief scheme, greedy, profiteering energy companies are subjecting businesses to over 400% increase on previous energy bills,” said NTIA chief executive Michael Kill.

“All of this in light of the fact that gas/oil wholesale prices in recent months have dropped below the levels prior to Russia’s invasion of Ukraine. The scaling back of the energy relief scheme by government at the end of April, will without doubt mean thousands of businesses and jobs will be lost in the coming months.”