A pub landlord who has worked in the hospitality industry for more than 40 years has warned huge increases in energy costs will force businesses to close and see people lose their livelihoods. Nick Newman, who is the landlord of the Blue Bell pub in Cardiff city centre, said some businesses are facing six-fold increases in prices and is calling for the UK Government to intervene.
Nick, 62, who is also the chair of the Cardiff Licensees Forum, said the industry was just about getting back on its feet after the pressures of the coronavirus pandemic and now faces yet another "bleak" situation as businesses grapple with rising costs. Speaking to The Sunday Times he described the situation as "Armageddon " for landlords.
Emphasising the real-time impacts on businesses that the rising energy prices are having, he said: "If we increased the price of our pints the way energy companies have increased the costs of their kWh you'd be looking at £20 a pint. That's the situation we are in."
Read more: The dire state of Cardiff’s Queen Street, the rundown and atrophying retail giant
Last month it was announced that people across the UK in private households can expect a huge increase in energy bills in coming months as the energy price cap rises to £3,549 per year in October. The new price cap is a rise of more than 80% on April's figure of £1,971 and will come into effect for around 24m households from October 1.
However, as there is currently no cap on energy for businesses, many are seeing their bills rise by tens of thousands of pounds as the cost per kWh continues to spiral. As a result some businesses have been quoted prices hundreds of percentages higher than what they currently pay with leaps as high as 500% in some cases according to the British Beer and Pub Association.
"There's huge uncertainty," said Mr Newman on Sunday. "Well, other than the certainty that we are facing, without a doubt, a minimum of 200% increase. I know for a fact from forum businesses that some of them have been quoted four or five-fold increases in their energy costs.
"There's some negotiation going on between businesses and energy brokers and energy companies but of the 30 or 40 businesses I've spoken to the best outcome is a 200% increase on energy costs. I have spoken to one person who runs several businesses that is facing a six-fold increase.
"Some businesses just about made it through Covid and a lot of them have said to me that any resources they had were wiped out through Covid but that's it – there are no savings, no resources. So there is absolutely nothing in the bank to deal with these increased energy costs."
Nick works for Croeso pubs which runs some of Cardiff's most popular bars including Retro, The Philharmonic, Brewhouse, Daffodil, and the Blue Bell where Nick is the landlord. He said rising energy costs will affect each business differently but that there are currently no profits to be made in the hospitality industry.
Tenant businesses, such as a couple running a pub, are likely to face severe challenges, he warned. "It might be a husband or wife looking after a pub. It's their business, and they might employ one person, and they might be providing a great local service to a community. They were wiped out in terms of resources and savings and now what they're facing is not only losing possibly their businesses, because a lot of them don't know how they're going to pay the increased energy costs, but a lot of people will lose their homes because they live above smaller pubs in the tenancies.
"A lot of us operate on incredibly tight margins. It can range from a business that is going to make no profits from this and then across to somebody who is actually going to lose their livelihood and their homes as well."
Nick says that of the 100 or so businesses in the forum just under 10% won't be able to survive the increased cost of energy. He said that throughout Covid around seven businesses in the forum closed. "There'll be people that I know individually. I quite often know the staff, the doormen, the history of the pub or the business, and it's desperately sad.
"Since we've come out of the last lockdown in Cardiff city centre, which I know as I've worked in Cardiff for 40 years, it's been a great vibrant atmosphere. We've had events returning, tourists returning, people coming back to our businesses with confidence, and you'd be expecting now a clear run until next summer or until people's pockets start to run out but that's without the energy crisis."
Nick said he believes the UK Government needs to intervene to curb the prices before businesses are forced to intervene. He said: "The UK Government leaders have to talk urgently with representatives of our industry to understand exactly what the situation is and there's going to have to be very, very rapid. I'm expecting to hear from the new Prime Minister tomorrow as to what it is that this government is going to do.
"The important thing for the hospitality representatives and leaders is to put pressure on the incoming Prime Minister and cabinet to to get this sorted out. We can't be anything but concerned. Some businesses are gravely concerned and are expecting not to survive. Others know that they are facing a really really touch time and costs will have to be reined in.
"If you're a younger person starting off in the industry well, as in life generally, I guess it must feel a little bit: 'What's going on?' With me, who's been around for a long time, you know that ultimately and eventually we will get through these things but it doesn't make it any easier while you're going through them."
Liz Truss, who is widely expected to be confirmed as the new Prime Minister on Monday, has promised to make an announcement on energy bills in the coming days if she is elected as the new Tory leader but stopped short of indicating what she had planned.
A UK Government spokesperson said: “No national government can control the global factors pushing up the price of energy and other business costs, but we will continue to support Welsh businesses and the hospitality sector in navigating the months ahead.
“We have provided the Welsh Government with its highest-ever funding settlement and cut taxes for businesses, including by increasing the Employment Allowance, which reduces national insurance contributions, and slashing fuel duty. We’ve also introduced a 50% business rates relief for retail, hospitality and leisure businesses and put the brakes on bill increases by freezing the business rates multiplier, worth £4.6 billion over the next five years.”
READ NEXT:
- Energy price cap: what is it, when is the announcement, and what support is available?
-
British Gas: How you can get £1500 off your energy bills even if you're not a customer
-
Calls to increase 'pitiful' £150 disability cost of living payment
-
Experts forecast when the energy price cap might actually go down
