LONDON (AP) — Electricity bills at Sophia Sutton-Jones’ bakery in north London have more than tripled since the start of the year. It now costs £5,500 ($6,260) a month to light the ovens and keep the lights on at Sourdough Sofia.
Where am I supposed to magically take £4,000 a month that I didn’t count on? She said. b Dealing with rising costsShe has to borrow 50,000 pounds and increase the price twice this year, for her breads, bagels and pretzels.
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The government will pick up the tab for six months from October 1, so businesses will pay discounted prices “less than half the wholesale prices expected this winter”.
Energy prices have increased. First, the global economic recovery from the COVID-19 pandemic, which boosted demand for oil, and then the severe aftershocks. Russian war in Ukraine. The UK only gets a small amount of gas from Russia, but because it has less nuclear and renewable power and less gas storage capacity, it is more vulnerable to fluctuating spot market prices.
Jamie Stewart, deputy director of the Strathclyde Center for Energy Policy, said the support package would “hopefully reduce the risk of immediate business collapse and job losses”. “Furthermore, businesses should be restricted from passing on costs by raising prices on their goods and services and exacerbating the already alarming cost of living.”
Business groups generally welcomed the announcement, but some raised concerns that the aid would end abruptly after six months. The government said it would conduct a review after three months.
Business owners like Sutton-Jones complained that relief was too slow to arrive.
“There’s no backlog, so basically we can’t take full advantage of the support package, and many employers will be forced to close,” she said. “What will happen to the huge debt that many businesses have already accumulated?”
The Federation of Small Businesses shared the concern and called for a crisis fund for companies in trouble.
The British Beer and Pub Association called the power support “a lifeline for many pubs and breweries this winter”.
Britain’s leading pubs had little time to recover from the outbreak before being hit by supply chain problems, labor shortages and across-the-board price hikes, which, combined with higher energy bills, “overwhelmed lost revenue for many businesses”. Seven pub, brewing and hospitality groups said last week. In a letter to the finance chief of the United Kingdom.
At the King’s Head pub in northern England, rising electricity prices have forced manager Cherlan Lowther to stop serving meals on certain days because it’s too expensive to run the kitchen’s power-driven oven, double boiler, three-deep fryer and dishwasher.
She said her latest electricity bill had jumped from the usual £500 to £800 a month to £1,600.
Although the new state aid keeps her bill at the previous level, “I can’t afford the 800,” Lowther said.
As winter approaches, she’s also taking a hard look at heating oil costs, saying kerosene for the pub’s outdated heating system “costs a lot these days.”
On top of that, she has a contract with a brewing company that increases the price of alcohol, just as customers in Cockfield Village are saddled with rising prices themselves.
On some recent nights, she’s only gained 20 pounds.
Since she started running the bar 10 months ago, she’s burned through reserve funds and now has “no money left to pay,” Lowther said.
“The whole time I was in the bar, I couldn’t get paid,” Lowther said, worried about going into debt.
A large pub operator, even a London-based chain Fuller, Smith & Turner PvtEnergy costs for 385 pubs rose to “unprecedented levels” this week.
Excluding UK government support measures, Fuller is expected to spend £18m on gas and electricity this year, up from £8m last year.
Small producers are also under pressure.
Exeter Coal was forced to increase the price of small mobile “retorts” – devices used to make charcoal by heating wood – by £3,000, to £17,450. The metal for the machines was cut with a precision laser by a nearby engineering firm.
“We’ve taken a big hit on laser-cutting costs,” said company director Robin Raul. “Energy costs go through the roof,” says the engineering firm.
Buyers are woodland owners, schools and local governments who have surplus wood to convert into charcoal to sell. But with the cost of labor and raw materials rising, “the bottom line is that most of our customers are beyond their means,” Raul said.
He said the company could deal with the crisis by developing a smaller, cheaper version that proved popular.
But Raul is concerned that the government’s plan is fiscally irresponsible. Officials did not say how much the bailout package would cost, but it is expected to be several billion pounds.
“I find what Liz Truss is planning particularly terrifying,” Raoul said. And as a trader, you can’t really spend money you don’t have.
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