By Denis Sheehan MIH, Publisher, H&C News: Is hospitality asking government for help with energy costs questionable?
The cost of energy crisis has led to countless calls on government from hospitality to do something about it. They go unanswered, prompting the question do they care?
It could be said that our government currently has little real power or influence on UK energy costs as the ownership of the energy supply chain within the UK, is largely owned by businesses outside of the UK.
Ownership of the Big Five UK energy retail companies
EDF Energy UK is owned by Électricité de France, a French public utility owned by the Government of France.
Scottish Power is 100% owned by Iberdrola, a Spanish energy electric utility which counts BlackRock and the Qatari Investment Authority as its major shareholders.
In early 2019 Npower was bought by E.ON UK, making both subsidiaries of the German parent company E.ON SE (listed in Germany). Among the major shareholders of E.ON SE are RWE AG, another German energy company, Capital Group, a US asset manager, and the Canadian Pension Plan Investment Board, a Canadian Crown Corporation.
Ovo Energy is privately owned and SSE is now part of Ovo (the two major shareholders of SSE are giant US asset managers: BlackRock and Invesco).
Centrica, the parent company of British Gas, major shareholders include the UK asset management firms Schroders and abrdn, as well as Bank of New York Mellon Corporation, a US investment bank.
Today when you are paying the gas and electricity bills for your hospitality business and see them not rising but multiplying by 2, 3, 4 times plus, you are largely not paying UK businesses you are in fact paying businesses in France, Spain, Germany, Canada, the USA and many others that own the majority of the UK energy supply chain.
Governments in other countries similarly impacted by rising global energy prices have taken action. The French government have enforced a 4% price rise limit on EDF to the benefit of all French hospitality businesses and citizens of France, albeit partly funded by UK price rises and profits that our own government have not addressed.
The calls on government to date focus on reducing the burden on hospitality businesses imposed by the energy price rises, and there is scope to do this if not the political will.
The soon to depart from post PM remains on holiday, and the two chasing his job have their minds set precisely on that and only that.
Both Conservative leadership contenders fail to vocalise any ideas of substance on tackling the energy price crisis. Instead they criticise each other’s plans, and/or u turn by adopting their oponents ideas where they seem to be impacting positively with their electorate, 0.3% of the population.
Actions are available to be taken
A windfall tax on the billions in profits made by the energy providers as a consequence of price rises could be used to reduce energy bills.
Just as consumers have a price cap, albeit one that allows eye watering increases, so could businesses. Even if such a cap paralleled consumers it would reduce the even more exorbitant increases on businesses.
Freezing the price cap on consumers and businesses. This would move the burden of energy costs back to the businesses that have profited so spectacularly and are as a consequence able to burden some of the cost rather than profit further.
Closing the loophole in the government’s energy profits levy, making sure they cannot be dodged.
The choices are difficult, but some have to be made rather than the current procrastination, which sees matters worsen by the day.
Is hospitality asking government for help with energy costs questionable? No it’s not. There is plenty that can be done and plenty more requests for them to do so need to be made.