London (AFP) – At Sophia Sutton Jones’ bakery in north London, the electricity bill has more than tripled since the start of the year. It now costs £5,500 ($6,260) a month to run the ovens and keep the lights on at Sourdough Sophia.
“Where should I magically take an extra 4,000 pounds a month that I haven’t figured out?” She said. to me Dealing with rising costsShe had to borrow 50,000 pounds and raise prices twice this year for loaves of bread, bread and pastries.
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The government will pick up part of the tab for six months starting October 1, so companies are paying discounted rates “less than half the wholesale prices expected this winter”.
Energy price increases have been fueled First through the global economic recovery from the COVID-19 pandemic, which has led to higher demand for fuel, and then through the aftershocks Russia’s war in Ukraine. The UK gets only a fraction of its gas from Russia, but it is more vulnerable to spot market price volatility because it has less nuclear and renewable energy and little gas storage capacity.
Jamie Stewart, deputy director of the Center for Energy Policy at the University of Strathclyde, said the support package “hopes to reduce the immediate risks of business collapse and job losses.” “It should also reduce the need for companies to pass on costs by raising the prices of their goods and services and compounding already severe cost-of-living pressures.”
Business groups have generally welcomed the announcement, but some have raised concerns about whether the aid will end abruptly after six months. The government said it would conduct a review after three months.
Business owners such as Sutton Jones complained that relief was too slow to arrive.
“There is no delay, so we cannot fully benefit from the support package, and many employers will be forced to close,” she said. “What happens to the huge debt that many companies have already accumulated?”
The Small Business Consortium shared the concern and urged the creation of a hardship fund for companies falling through the cracks.
The British Beer and Pub Association described energy subsidies as “a lifeline for many pubs and breweries this winter.”
Famous British pubs barely had time to recover from the pandemic before they were hit by supply chain problems, labor shortages and price increases across the board which, combined with exorbitant energy bills, “for many businesses, have wiped out these total net income” Seven groups of bars, brewing and hospitality said last week In a letter to the UK’s Chief Financial Officer.
In the King’s Head pub in northern England, high electricity prices forced manager Cherylanne Lowther to stop catering on some days because it was too costly to run an energy-consuming oven in the kitchen, a double boiler, three deep fryers and a dishwasher.
She said her recent electric bill jumped to 800 pounds a month from her usual 500 and was set to double to 1,600 pounds.
Even if the new government support kept her bill at the previous level, Luther said, “I couldn’t stand 800.”
With winter approaching, it is also preparing for rising heating oil costs, saying the kerosene for the old pub’s heating system is “costing a fortune right now.”
Moreover, it has a contract with a brewing company that raises the prices of alcoholic beverages just as customers in Cockfield Village, burdened by their rising costs, often spend at home.
Some recent nights, I only made a profit of 20 pounds.
Since she started the pub 10 months ago, Luther said, she has run out of spare money and now “there’s no money left to pay for anything.”
“All the time I’ve been in the pub, I’ve never been able to get paid,” said Luther, who fears going into debt.
Even the largest pub operator, a London based chain Fuller, Smith & Turner plche said this week that energy costs in the 385 bars have risen to “unprecedented levels”.
Without taking into account British government support measures, Fuller expects to spend £18m on gas and electricity this year, up from £8m last year.
Small manufacturers are under pressure, too.
Exeter Charcoal has had to raise the price of small mobile phone “processors” – devices used to make coal by heating wood – by £3,000, to £17,450. The metal for the machines is cut with a precision laser by a nearby engineering firm.
“We just had a huge success with laser cutting costs,” said company director Robin Rawle. “The engineering firm’s energy costs go through the roof”.
Buyers include forest owners, schools, and local governments who have additional wood that they can convert into charcoal for sale. But along with rising labor and raw material costs, “the whole thing is beyond what most of our customers can afford,” Roll said.
He said the company will be able to weather the crisis by making a smaller, cheaper version that has proven popular.
But Raoul worried that the government’s plan was financially irresponsible. Officials have not explained the cost of the support package, but it is expected to amount to several billion pounds.
“What Liz Truss is planning is, I find it particularly scary,” said Rawell. “The amount of money involved – all we do is build up debt. And as an entrepreneur, you can’t really spend money that you don’t have.”
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