'Liz Truss's energy plan is not enough to help us'

Scottish hospitality businesses say the prime minister's energy announcement lacked clarity

Scottish businesses have warned Liz Truss that her plan to help firms cope with energy bills may not be enough to prevent a "tsunami" of closures.

The prime minister will cap average annual household energy bills at £2,500 for two years, with companies receiving "equivalent support".

But hospitality bosses facing soaring costs have criticised a lack of clarity from Westminster.

The government insists its strategy will help boost economic growth.

Businesses, as well as charities and public buildings, will see their energy costs capped at the same price per unit that households will pay under the new plans.

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The commercial scheme is set to run for six months and is to be reviewed after three – at which point targeted support could be introduced for certain sectors deemed to be particularly vulnerable.

However, Scottish hospitality business owners have told BBC Scotland that Ms Truss's statement was short on detail.

Pub owner Billy Gold said the prime minister's announcement did little to allay his fears

Billy Gold, owner of the Heilen Jessie bar in Glasgow's east end, has seen his standing charges alone increase by 600%.

He warned that the UK government's proposals would do little to stave off the crisis facing his family business.

"To say businesses will receive equivalent support I think is ambiguous in the extreme," Mr Gold said.

"If that means 'look how well I've done, things won't go any higher', I'm sorry Liz, things are too high already and my business, like many businesses, is on its uppers."

The publican explained he would have to charge £8.40 for a pint of his cheapest lager, as well as increasing turnover, to keep his firm on an even keel.

"You don't need to be Alan Sugar to figure out that isn't going to happen," he told the BBC.

Mr Gold, who described small and medium enterprises as the "lifeblood" of the economy, said he may have to start reducing his staff of 11 local workers.

"I don't even want to say it but if I've got to do it I don't have a choice," he added.

"It would break my heart to be the guy that's got to do that but if that's what I've got to do, that's what I will do.

"But you cannae run a business without staff. You're then on a race to the bottom, a downward spiral."

Singl-end boss Paul Banham is demanding clarity from the UK government

Paul Banham, operations director of the Singl-end cafe and bakehouses in Glasgow, said the prime minister's statement had sparked confusion.

He told the BBC: "I don't know what will happen if I've signed up to a contract two months ago, will the price cap still apply to that?

"There's also talk of a sector-specific review over the next few months to try and come up with more targeted help.

"The hospitality industry would say there was some targeted help during Covid so why can't some of that support not be applied straight away? Why does it have to be a three-month wait?"

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Mr Banham added: "Many businesses won't be able to survive while they wait."

He said VAT cuts and business rates relief would also be required to save struggling hospitality firms.

"A price cap is a basic starting minimum to stop the impending tsunami of businesses closing," he said.

"Every week that goes by, every month that goes by, operators are getting pushed to the brink."

Baker Andrew Chisholm says his firm will struggle to survive the next year

Andrew Chisholm, who runs Airdrie-based Christie the Baker, is also awaiting further clarity from the government.

"It's all guesswork," he said. "There's nobody giving me precise figures off the back of what we heard this morning.

"We still haven't really seen the devil in the detail."

His firm is facing a 600% gas bill increase under Ms Truss's proposals, with a further 200% hike in electricity costs.

"Going forward, the way the gas price is, it will be unsustainable," he added.

"I still think that it's going to be very, very difficult running this business in the next 12 months."

'Cliff edge'

The Federation of Small Businesses Scotland has warned that one in six small firms is expecting to close, be sold or downsize in the next year.

Policy chair Andrew McRae "warmly welcomed" Ms Truss's announcement, but added: "We do need more detail and we'll be working with the new government to clarify what happens next.

"The six-month lifeline to get businesses through the winter is vital, but this must not result in a cliff edge with businesses being hit even harder in the spring."

The UK government says its price cap will spark economic growth and curb inflation by as much as 5%.

Ms Truss told MPs: "Extraordinary challenges call for extraordinary measures, ensuring that the United Kingdom is never in this situation again."