New Prime Minister Liz Truss has pledged to help households with skyrocketing energy bills. But there have been few details on how the government will support small businesses, amid fears the industry will be ‘decimated’ and thousands of jobs lost.
Here, three successes Kent businesses reveal how their annual gas and electricity costs are set to soar by tens of thousands of pounds – and warn the impact will be worse than lockdown. Report by Gerry Warren and Rhys Griffiths…
Luthier to the stars: ‘I can’t believe the government will allow this to happen’
His business is one of the great success stories of small, traditional British craftsmanship of international renown.
But Canterbury luthier Alister Atkin – who has made instruments for musical legends like Sir Paul McCartney, Bruce Springsteen, Dolly Parton and Ed Sheeran – has been hit by a shock financial offensive.
Because he fears his energy bill will rise from £6,000 a year to £50,000 by January.
The 47-year-old craftsman, whose workshop is based at Lakesview International Business Park, says it would be a huge sum to find.
In 25 years, he grew the business from one man to a group renting a bench in another guitar shop to owning and running a double unit factory with a team of 10 craftsmen who together produce 500 instruments a year.
His reputation for his acoustic guitars is so great that he has been commissioned by the Buddy Holly Foundation to make special hand-painted guitars for some of the biggest names in the music industry.
But he faced a dilemma when his energy company last week offered him a one-year contract for £24,000 a year, four times his current bill.
“I had to give them a decision that day, but I just wasn’t happy to commit under such pressure and at such short notice,” he said.
“I realize this means we could be facing a £50,000 bill if the forecast is correct when we have to renew in January.
“But I can’t believe the government will allow that to happen because it would mean hundreds, if not thousands, of businesses going bankrupt with huge job losses.”
Alister says his business relies heavily on electricity for his machine shop and he can’t do much to reduce his expenses.
“Also, we have to have air conditioning in the summer – otherwise it would be unbearable,” he said.
“Of course we can turn off some lights, but we have LED bulbs anyway, so I don’t think that will help much.
“The focus so far has been on household bills, which is bad enough, but it could decimate industries across the board.
“I want to take care of my team because they have unique skills and are passionate about what we do.
“We urge the government to act quickly as this could push many businesses over the edge.”
The cafe owner: “We will not survive the winter”
Hotel businesses face an even bigger crisis than the shock of the lockdown, a worried cafe owner has warned.
Nicola Robinson, who has run Nutmeg cafe in Hythe for 14 years, says businesses like hers simply won’t survive the winter unless the government steps in to help with soaring energy costs.
She currently spends around £650 a month on the energy she needs to run her High Street business. But he was told that in November this bill could reach £3,000 or more.
Ms Robinson, who co-owns a delicatessen in Tenterden and previously ran a cafe in Ashford, believes the situation in energy-intensive sectors such as the hospitality industry is worse than during the darkest days of the pandemic.
Because businesses like hers were closed to stop the spread of Covid, financial support and furlough payments got them through.
This time, however, the challenge is to keep the doors open as bills soar and customers grapple with a growing cost-of-living crisis.
“My utility bill is currently £650 a month which has been rising steadily over the past few years,” she said.
“I had a renewal quote of up to at least £3,000 a month which was a major shock. It’s devastating.
“Having come through Covid, we’ve only just gotten back on our feet. It’s really ‘watch this space’ – see if the government can help us in the next few weeks.
“As a daytime cafe, we have a huge amount of equipment that uses electricity, so our consumption is considered very high. There is not much we can do about that.
“We’ve already turned off a few freezers, turned off the lights and things like that, but if I want to stay in business like I am now, it’s not viable.
“Rising rates, which for the moment are not capped, will affect us massively.”
All eyes are now on the new administration of Liz Truss to outline its plans to support the economy during a time of runaway inflation and rising bills.
“We need some sort of emergency package put in place to help us out,” Ms Robinson said.
“I have no idea, there are a lot of different options right now on how they could help.
“But it has to be for hospitality and high-energy users, small businesses, or it will be the death of small independent business.”
The boss of independent cinema: “The shops will simply close”
Meanwhile, the owner of an independent cinema in Kent says he is “dreading” the new demand from his energy supplier – which he says could be up to ten times what he is currently paying.
Robert Johnson, who runs the Kavanagh in Herne Bay, is bracing for a potential monthly bill approaching £12,000 which he says will be devastating for the business.
He acquired the cinema 12 years ago and has invested a lot in it.
The venue has two screens and a film club where members can attend morning screenings for just £4, which include coffee or tea, and are available for private hire.
But he says revenues have not returned to the numbers they enjoyed before Covid and the lockdown.
Now that overhead costs are about to skyrocket, he fears for the future of businesses like his.
“We use a lot of energy keeping the place warm, powering projectors and running things like popcorn machines and refrigerators for our ice cream,” he said.
“There’s no way around these lit things – but the other day I even pulled out an old manual carpet sweeper to avoid using the vacuum cleaner.
“You can’t keep raising prices because people will stop coming and we don’t have bottomless money to subsidize it.”
“Businesses will simply close and lots of people will be laid off…”
Mr Johnson also says the government must step in to help.
“They have to do something or businesses will simply close and many people will be made redundant,” he added.