Businesses at risk despite energy relief scheme

Energy costs at Pitlochry Festival Theatre have increased by 101% and managers there say the cap should have been for 12 not six months
Energy costs at Pitlochry Festival Theatre have increased by 101% and managers there say the cap should have been for 12 not six months

DOUBT has been expressed over whether the UK Government’s new Energy Bill Relief Scheme will be enough to ensure businesses will survive this winter.

Even with the announced limited tax cuts on National Insurance and corporation tax and duty, the scheme is “unlikely” to provide the support needed to stay afloat, according to Night Time Industries Association Scotland.

A spokesperson said the association was “extremely disappointed” with the announcement from Chancellor Kwasi Kwarteng.

“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,” she said.

“We have been extremely clear with the Government that the Energy Bill Relief Scheme – even with the announcement of the limited tax cuts on National Insurance, corporation tax and duty – is unlikely to be enough to ensure businesses have the financial headroom to survive the winter, especially with the announcement of the rise in interest rates from the Bank of England.”

The association has called on the Chancellor and Government to reconsider the measures and re-evaluate the inclusion of general business rates relief and the reduction of VAT.

The creative sector has also criticised the lack of long-term security provided by the new measures. Bectu, the creative workers’ union, said there was worry over what would happen in March when the scheme expires.

“The creative industries urgently need a targeted, flexible, sustained support plan to safeguard the sector and its jobs beyond the next few months,” said Bectu head Philippa Childs.

At Pitlochry Festival Theatre, head of operations Mike Ives said the Energy Bill Relief Scheme and the capping of energy costs for the next six months would help the theatre through the winter, but there were long-term challenges as energy costs had already increased by 101%.

“The theatre is being advised not to enter into contracts for longer than 12 months due to the volatile nature of the energy industry, and therefore it would have helped if the energy cap had been for twelve months rather than six,” he said.

Liam Sinclair, executive director and joint CEO of Dundee Rep and Scottish Dance Theatre, agreed.

“Like all business, we are facing significant pressures arising from the inflationary challenges within the economy right now,” he said.

“These, of course include energy, but also material costs, supply-chain, recruitment challenges and skills shortages and increasingly, a huge worry about the impact on disposable income which theatres heavily rely on by way of ticket sales.

“As the performing arts industry still suffers from the effects of the global pandemic and lockdown – not least as theatres were the first to close and last to reopen – we call on the decision-makers to think beyond the next six months and implement long-term solutions now to help us face the challenges ahead.”