Chef Tom Kerridge fears many businesses in the hospitality industry will go under this winter as energy bills skyrocket during the cost of living crisis.
The Michelin-starred chef, from Salisbury, has run the Bull & Bear restaurant in Manchester’s Stock Exchange Hotel on Norfolk Street since 2019. He said that he has heard of cases where restaurants are facing rising energy costs of ‘anywhere between 300 to 700pc’ this year.
Earlier this week, Kerridge said energy bills at his three pubs in Marlow, Buckinghamshire had skyrocketed from £60,000 to £420,000. One pub alone is expected to see its usual monthly electricity bill go from £5,000 to £35,000 in December.
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He told the Manchester Evening News the industry is facing a ‘terrifying’ winter and expects many small independent restaurants and pubs to close before the end of the year unless the government intervenes.
Mr Kerridge said: “If you think of the small independent pub where the owners live upstairs, if their electricity bill rises by £70,000 then there is going to be no pub anymore. That’s the end of it.
“There is a colossal tidal wave of issues coming our way unless we face up to it and our government starts to look at it in a very constructive way.”
Mr Kerridge said that the toll on energy bills is affecting every aspect of his business and therefore inevitably leading to increased costs across the board.
“It’s not just us, it’s the bigger supply chains that are being affected too,” he explains. “If we’re having those issues, so are our butchers, our fishmongers and our dry stores. It’s all part of a knock on effect that comes at a cost to our business.”
Mr Kerridge said that every business is currently struggling, and he believes it is not possible for owners to keep operating with such a rise in energy bills. For those in the hospitality, retail, tourism, and leisure industries, it's just another blow after the hard hit of the pandemic.
“The reality is that every small business out there is struggling," he explains. "Hospitality has been at the forefront of the pandemic and any industry that thrives on connecting with people has been hit hard in the last few years.
"There’s no cap on energy bills so the prices being quoted can be an increase of anywhere from 300 to sometimes 700pc. Those businesses are just not able to hold on with that, it will lead to the closure of so many places.
“The fact that utility bills are coming in at those sorts of prices will really make the difference between places, whether they’re large hotels or smaller independent pubs, staying open or closing. It's inevitable.”
He said the government ‘absolutely’ needs to step in right now and is calling for an energy price cap for business, alongside VAT reductions. As it stands, the energy price cap only covers domestic customers on standard variable rate tariffs (SVTs).
In an open letter to the Prime Minister, UK Hospitality, the Night-Time Industries Association, the Music Venue Trust, the British Institute of Innkeeping and the British Beer and Association have also urged for an energy price cap for businesses.
“Any amount of cuts you can make will not cover an increase in costs that have risen by 300pc,” Kerridge says. “It’s just not possible. Right now, there is no cap on industry utilities, such as power and electricity, and it’s something that really needs to be brought in by the government. A reduction in VAT also needs to come into place. I think both things would really help businesses during this time.”
He adds: “We’re having to take a serious look at what the future holds for the industry and for our restaurants. We have to look at the bigger picture as to how we can get ourselves out of this huge situation that we find ourselves in. But it’s not just individuals, it’s the industry. It’s every single industry.”
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