OWhen the Faulkland Inn opened, George II was on the throne and Britain was at war with Spain. Since then, the 280-year-old coaching inn has weathered a dozen recessions, two world wars and the Covid pandemic. Today’s skyrocketing energy bills have proven a battle too far. The village pub near Bath faces closure with the loss of eight jobs as it can no longer afford to keep the lights on.
“Our gas and energy bills have doubled since April and we face annual fuel costs of at least £20,000 which will wipe out our profits,” says owner Andy Machen. “Until April we needed to earn £2,500 on the four days a week we are open in order to break even; now we would need to earn £4,000 and pay the staff from our personal savings.
The pub is one of hundreds of hospitality venues facing extinction across the UK due to soaring fuel prices. The energy price cap imposed by UK regulator Ofgem to protect consumers does not apply to businesses which pay, on average, double the capped price for gas and electricity and, while households must receive government payments to help pay energy bills, there is no such support for small businesses.
Machen, who bought the inn with his wife three years ago, says that with the focus on household fuel costs, family businesses have been forgotten. “The government has given us thousands of pounds to help us through the pandemic and at the start of the year we were on track to recover, with plans to expand our guest accommodation,” he says. “Then out of nowhere the bills doubled and there was no time to plan or budget for this.” Our eight employees will receive government grants to help them pay their own energy bills, but they will no longer have jobs because we cannot pay ours.
Their daughter Danielle Frankcom, who is the pub’s manager and helps with general management, says they will continue for as long as possible. “Everything is pretty awful right now,” she says. “We were fine until two months ago and now it looks like everything is bad. Our premises have been fantastic and we have been busy every night but sometimes with bills it just isn’t viable is it? »
A year after the government launched its hospitality recovery strategy, which predicted that pubs and restaurants would help reinvigorate local economies, only one in three establishments are reporting a profit, according to a recent survey by the British Beer and Pub Association. Energy bill increases of up to 150% are the main reason for the decline in turnover and nearly half have had to reduce their opening hours to avoid closure.
Last month the number of pubs in England and Wales fell to the lowest level on record, with 7,000 having closed since 2012. There are fears the impact of the energy crisis could be worse than Covid, with some sites predicting additional costs of up to £60,000 by the end of the year.
“This is just the beginning,” says Emma McClarkin, chief executive of the BBPA. “Bills will only continue to rise as we head into winter and put pubs at risk. We urgently need an energy price cap for small businesses before sky-high energy bills cripple pubs and we lose them forever.
The Machens have already reduced their opening hours to four days a week to mitigate costs. They plan to close permanently at the end of the summer once reservations for their three guest rooms are filled. The closure will leave the small village almost five miles from the nearest pub. The 400-year-old pub in the nearby village of Buckland Dinham closed in March. “A pub isn’t just a business – it’s a way of life,” says Machen. “For some of our regulars, we are their social life.”
Robinsons Brewery, which has 260 pubs and hotels in the North West of England, says landlord tenants whose fixed-term energy contracts end are seeing their profits wiped out by rising costs. “Utility bills have exceeded wages for the first time,” says Ben Robinson, the 181-year-old brewery’s operations manager. “One of our small pubs saw its unit price drop from 13.5p per unit to 55p overnight and the ongoing charge doubled to £1 a day, adding £18,000 to the bill annual fuel. Some large pubs that make a profit of around £45,000 a year are seeing their bills rise from £25,000 to £80,000.
Robinson predicts the impact of soaring bills will be worse than that of Covid as hospitality has been cushioned by lockdowns thanks to government funding. “Now we don’t get any significant help,” he says. “We urgently need the government to give businesses the same protection as individuals and cap energy prices.”
The Department for Business, Energy and Industrial Strategy told the Guardian the price cap was applied to households after energy suppliers were found to be making excessive profits on customers who don’t ‘had failed to change, but the companies were excluded from protection because there was no evidence that they had been exploited in the same way. He said he helps small businesses improve their energy efficiency.
“No national government can control the global factors driving up energy prices and other business costs, but we will continue to support the hospitality industry as it navigates the months ahead,” a doorman said. -word.
“This includes providing 50 per cent business rate relief for pubs and businesses across the UK, freezing alcohol duty rates on beer, cider, wine and spirits and the reduction of employers’ national insurance. This is in addition to the billions in grants and loans offered throughout the pandemic.
Machen says the unpredictability of energy bills makes it impossible to plan ahead and, with profits still depleted by Covid, he and his wife worry they will rack up heavy debt if they continue to trade. “We own the freehold so we won’t lose our house, and I have another job that brings me an income, but it will be devastating for the staff who are tight-knit and love their jobs,” he says. “This pub was my wife’s big dream, her Shangri-la, and it’s been the heart of the community for 300 years, but now I can’t see any light at the end of the tunnel.”