A support package that will cut energy bills for businesses is “just a starting point”, according to the owner of a Perthshire hotel.
The UK Government scheme will fix wholesale gas and electricity prices for firms for six months from October 1, shielding businesses from crippling costs.
However, that is not enough, according to the chairman and CEO of Crieff Hydro.
Stephen Leckie said the package of support announced by the UK government would not help the Perthshire hotel.
He said: “It will make no difference whatsoever from our point of view.
“Where it might make a difference is to consumer confidence.
“It has always been a cost but now it is such an exorbitant cost, and we don’t know what support we’re going to get.
“It’s more than just gas and electricity too – we don’t know what the prices are going to be for diesel, petrol.
“It’s also food costs, and we don’t know what the minimum wage is going to be next April.”
Mr Leckie said the hotel’s energy bill will increase by £1 million this year. That could rise by a further £1m next year.
“We’re locked into contracts which we know will cost us a further £1m but our electricity last year was £600,000.
“We won’t know the impact until next year.”
He said businesses need further support and hoped for more information in Friday’s mini-budget.
“It is a start, but it’s just that”, he said.
Mr Leckie warned previously that the hospitality industry is facing a ‘cost of business’ crisis.
Proposals don’t ‘live up to the hype’
That view was echoed by the Scottish Licensed Trade Association.
Managing director Colin Wilkinson said the proposals don’t “live up to the hype”.
He added: “This new scheme caps the wholesale price and pubs and bars could still be paying 200-300% higher bills than normal.
“There are pubs and bars currently on a rate of 90p per kWh, in comparison to 15p in normal times.
“The government says the current wholesale price of gas is about 42p per unit therefore businesses should see a reduction of 21p in their unit price.
“This still means much higher bills than before the energy crisis.
“Nothing in the plan tackles the problems of large deposits and bonds, particularly for the SME independent sector, nor restricts the additional margins made by the energy suppliers.”
Many Scottish firms ‘on the brink’
Scottish Chambers of Commerce chief executive Liz Cameron welcomed the support package.
But she said it may not be enough to reassure all businesses.
Ms Cameron said businesses have faced “unsustainable” energy bills for the majority of 2022.
Many have been forced to close as a result of the hike in prices, while others are “on the brink”, she said.
Ms Cameron added: “It is welcome that the UK Government has finally responded and stepped up to provide an initial support package for firms by capping business energy bills for six months.
“Today’s support will come as a significant relief for those firms who were facing imminent closure without support.”
However, she said the six-month cap may not be enough for some firms.
Ms Cameron added: “We are concerned that even more sudden rises in energy bills will await firms once the cap is lifted.”
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