Small and medium sized firms in the hospitality sector should be released from high cost energy tariffs in the face of falling costs, the president elect of York & North Yorkshire Chamber of Commerce has said.
Sarah Czarnecki, director of the Grays Court Hotel in York, has written to energy regulator Ofgem to call for intervention on behalf of an estimated more than one million firms nationwide stuck in high tariff deals.
Research from the British Chamber of Commerce estimates more than a quarter of the UK’s small businesses signed new energy contracts when prices were at their peak at the end of last summer. However, in the months following that peak, prices have begun falling leaving a huge amount of businesses paying over the odds for their utilities.
Ms Czarnecki said: “My ask, in writing to you as the industry regulator, is that you listen to the voice of the SME sector and work with energy suppliers to reflect on the declining cost of energy and allow those firms stuck in high tariff contracts to be offered more favourable terms.
“The notion of a ‘blend and extend’ arrangement has been mooted and would allow SMEs to combine their existing rates with those which reflect current trading reality.
“A number of hospitality businesses have already closed their doors citing the inability to survive in the face of unmanageable energy bills. If no action is taken we run the risk of losing more crucial businesses which form the bedrock of high streets in every city, town and village in our country.
“Hospitality was a sector so dearly missed during lockdown. The businesses who are its lifeblood have faced challenge after challenge after challenge and are, as yet, unable to gain any respite.
With your intervention, they can get a fair crack of the whip and move towards more stable and prosperous times.”
In North Yorkshire, the hospitality sector is worth a Gross Value Added (GVA) contribution of £865m and is responsible for some 48,500 jobs across 4,035 businesses.
However the sector has faced innumerable challenges in recent years.
It was the first sector to close and the last to open during the pandemic lockdowns. Since the restrictions have eased, its position has remained acutely challenging owing to labour shortages, supply chain disruption, inflation and the war in Ukraine.
Find out how the Chamber is supporting the sector with the Hospitality Forum and read the recent Hospitality Forum report, “Understand, Influence Celebrate.”