Energy Chaos: Businesses Paying More Than Rent
Over the past few months, the way companies pay for their lights, heaters, and machinery has turned into a comedy of errors—just not the funny kind. Energy bills have shot up from being the fourth biggest operating cost to the second biggest, outstripping both rent and business rates combined.
Why the Sudden Surge?
- Unlike households, businesses don’t benefit from the government’s energy cap.
- Without that safety net, companies are left to face the full fury of global price spikes.
- The result? A steep climb that many townsfolk haven’t prepared for.
Case in Point: The Struggling Night‑owl
Take the 24‑hour bar that served up drinks for a living. In the last two or three years, its monthly energy bill hovered around £35,000—roughly 13p to 18p per kilowatt hour. But in the first quarter of this year, the ledger flipped wild: that same cost doubled to about £85,000. Suddenly, the business was drowning in a sea of invoices, and the numbers screamed, “This isn’t sustainable!”
What Businesses are Facing
- Increased operational costs cut into profit margins.
- Cash flow becomes a tightrope, as suppliers demand quicker payments.
- Unpredictable energy prices make strategic planning a guessing game.
In short, the energy crisis is turning the business world into a high‑stakes game where the stakes are literally the amount of energy you can afford to consume. Buckle up—it’s a wild ride with no sunglasses in sight.
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High Energy Costs Threaten Night‑time Economy Businesses
Picture this: if a club or a late‑night bar signed a new energy contract today, the price per kilowatt‑hour would tumble above £145, pushing annual bills into the £150,000–£200,000 range. That’s more than ten times the cost two years ago, and it dwarfs the combined rent and business rates combined.
The Cost Spike Cascade
- Staffing costs keep climbing.
- A supply‑chain crunch has pushed prices everywhere.
- Insurance premiums and public‑service taxes go up.
- And now – the energy bill is the new villain.
With electricity costs jumping so high, many businesses are stuck in a tight spot. The odds are that a lot of them might close in the next few months unless something drastic happens.
Energy Firms Are Adding Extra Pressure
Supplying energy isn’t just a paperwork shuffle anymore. Companies are demanding six‑month security deposits just to lock in a new contract. And the big ones are refusing to outsource to night‑time businesses any more.
According to Michael Kill, chief of the NTIA, firms keeping a new contract are seeing their energy costs jump by between 300% and an eye‑popping 1000% of what they used to pay. That’s a staggering increase.
In many cases, the annual cost for energy under a new contract will outweigh rent and rates together. Energy is becoming the second biggest operating cost for night‑time enterprises, only behind the workforce.
Urgent Call to Action
“This is unsustainable,” says Sacha Lord, chair of the NTIA and Night‑Time Economy Advisor for Greater Manchester. “Without urgent help, we’ll see thousands of venues shuttered. That will cripple economic growth across the UK.”
Sacha adds: “The prime minister, the chancellor, and every political contender need to unite. We’re looking for practical solutions, a VAT cut, an extension of business‑rate relief, and an energy cap for SMEs.”
What’s Next?
For now, we’re asking everyone to stay on the ball. Stay informed and keep an eye on how this crisis unfolds, because the future of the night‑time economy is on the line.
