Hospitality body calls for compromise over energy bills as firms face winding-up orders

Energy firms should offer compromise solutions if business customers are struggling, argued the hospitality trade body’s chief.

British Gas, owned by  Centrica, has issued 37 winding-up petitions so far this year, with 13 businesses ultimately being wound-up, The Daily Telegraph revealed yesterday.

Elsewhere, rival EON issued 21 petitions, resulting in seven firms being liquidated.

Monster energy price increases “could not have come at a worse time” for venues, UKHospitality boss Kate Nicholls told CityA.M.

Winding up petitions “come at the expense of livelihoods and jobs” and “should be avoided at all costs,” Nicholls added.

Businesses have urged ministers to issue more support when an existing energy bill relief scheme is set to expire in April next year.

Pubs and brewers especially “need assurance that bills won’t rocket and completely wipe out profits,” Emma McClarkin, chief executive of the British Beer and Pub Association said yesterday. 

It comes as hospitality venues are facing a mountain of costs, ranging from labour to food to energy bills.

E.ON, which has hundreds of thousands of business customers, said customers considered for a petition could afford to pay but were choosing not to.

The firm stressed it had not “changed approach or [introduced] harsher policies.”

British Gas said it did not treat such actions “lightly” and only considered them “where there is clear liability.”

Rival supplier, Octopus Energy, which is home to 45,000 businesses, told City PM it has never issued a winding up petition to customers – and “categorically never would do as it goes against our DNA.” 

It instead looks to provide tailored account such as payment plans and holidays – with the majority of its customers labelled as SMEs.

FSB urges energy firms to work with businesses

Industry group the Federation of Small Businesses (FSB) has previously written to the Government over its concerns about “unethical practices” from energy suppliers.

Policy chair Tina McKenzie welcomed any opportunity to “work with energy suppliers to find a solution to help small firms repay their debt while continuing to operate.”

She urged firms not to disconnect “vulnerable” small businesses and slammed suppliers for increasing winding-up orders over the winter.

McKenzie said: “To have these big energy suppliers kick their small business customers when they’re down is utterly unacceptable.

For some “very energy hungry players” it was not realistic to ask firms to reduce utility consumption, Nigel Pocklington, chief executive of Good Energy told CityA.M. 

“All we can do is maintain a very clear dialogue” with customers, he added.

Businesses are currently sheltered from soaring wholesale costs via the Energy Bills Relief Scheme, which runs until April and caps electricity and gas at £211 and £75 per MWh respectively. 

Unlike households, their prices are not contained via an energy price cap, with firms typically instead securing 1-2 year agreements for medium-term gas deals. 

Chancellor Jeremy Hunt recently has announced universal support will end from next spring, with the support package expected to be reviewed over the coming months before more targeted support set to be unveiled from next April.

When approached for comment, Ofgem acknowledged the difficulties businesses were facing in “getting fixed rate energy deals and also that some are being asked to pay large deposits by some suppliers.”

A spokesperson confirmed: “We are working with the Government and stakeholders to determine if further action or assistance is needed to help businesses.”