Britain’s pubs threatened by ‘alarming’ energy price hikes
LONDON — With every day that passes, Lindsey Armstrong’s dilemma gets worse as Britain’s energy crisis closes in on her pub.
By the beginning of October, she must renew her electricity contract, but the only price she can get is $135,000 a year — up from at most about $31,000.
“The price goes up daily,” said Armstrong, who owns a Champs Sports Bar and Grill in Washington, a small town in northeast England. She has admittedly given herself little time but says she never anticipated prices rising so much. And the shortest contract she has been offered is for three years.
She’s reluctant to sign a fixed-term contract at current prices.
“The longer I wait, the harder it gets to make a decision, but I can’t actually sign myself into a contract of that length,” she said, “because I know I can’t afford that.”
Armstrong is taking the risk of waiting with the hope that by the time a new contract must be signed, a new government will have intervened.
Across Britain, there is rising panic about the cost of energy. Households face an 80% increase in the price cap on their energy bills starting next month.
There has been some government help with residential gas and electric bills, and there is expected to be more, though what form it will take is unknown as the country waits for a new prime minister to be formally appointed Tuesday.
Businesses have fewer protections. Industry groups are warning that there could be a tsunami of closings over the winter if small but energy-intensive companies, especially pubs
and restaurants, don’t get help with skyrocketing bills.
BrewDog, a prominent brewery and pub chain, said it was closing six locations around the country — just two weeks after opening its largest-ever bar in London — because of “spiraling” energy bills and other rising costs.
“Reality in the hospitality space is starting to bite and bite hard,” James Watt, a BrewDog co-founder, wrote in a LinkedIn post Thursday announcing the closures. The chain will still have about 70 locations in Britain.
Recently, CEOs of six large pub chains and breweries and the head of the British Beer and Pub Association called on the government to provide “swift and substantial” intervention. Without it, “there is no doubt we will witness a huge number of pubs close their doors for good, leaving individuals without jobs during a cost-of-living crisis,” they wrote.
While alarms are ringing for pubs, the energy crisis is sweeping through the economy. The Federation
of Small Businesses has warned of the impact on everything from fish-andchip shops to launderettes.
The group estimated that electricity bills for small businesses had risen nearly 350% since February 2021, and gas bills more than 400%.
Some businesses have already closed, including a small radio station, cafes and shops.
Others, including a food bank and hospices, have expressed grave concern about how they will afford rising bills.
There is no way for many of these businesses to fully absorb the costs or increase their prices to cover them.
The Bank of England predicts that the British economy will enter a long recession this year as household incomes experience their worst squeeze in generations.
Inflation is rising at the fastest pace in 40 years, climbing 10.1% in July from a year earlier, and wage growth isn’t keeping up. The situation has prompted dozens of strikes across the country.