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UK businesses face closure over energy crisis

Live music venues and pubs are seeing energy bills increase by an average of 300%, adding tens of thousands of pounds to running costs

By IQ on 30 Aug 2022

Associations are concerned that the high cost of energy bills could now close venues forever

Associations are concerned that the high cost of energy bills could now close venues forever


Grassroots music venues are among the small and medium-sized businesses in the UK that are facing closure without immediate action to curb rocketing fuel bills.

With businesses excluded from the energy cap, some venues are seeing their energy bills increase by an average of 300% –in some cases as much as 740% – adding tens of thousands of pounds to their running costs.

Based on a survey of its 941 venue members, Music Venue Trust (MVT) revealed that venues face an average 316% rise in fuel bills, taking the average cost to £5,179 per month per venue, up from the current average of £1,245.

One venue has been quoted £42,000 a year for fuel – more than treble its previous bill of £13,200 – with the supplier saying they will only accept full payment in advance.

MVT is now warning that the surge in energy bills means that around 30% of the entire network of venues face the threat of permanent closure.

Around 30% of MVT’s entire network of venues face the threat of permanent closure

Pubs are also seeing energy costs soar by as much as 300%, with brewery bosses telling the BBC that the crisis would cause “real and serious irreversible” damage to the industry without support.

Both the hospitality and entertainment sectors are now urging the government to introduce a cap on the price of energy for businesses. The live music sector is also calling for VAT to be decreased from the current 20% to 12.5% and for business rates relief to be extended.

“Alongside the simply unaffordable increases to costs, the government must urgently address the fact that the market for energy supply has collapsed,” says Music Venue Trust CEO Mark Davyd.

“We have multiple examples where venues do not have any option other than to accept whatever price increases and tariffs are proposed by the sole supplier prepared to offer them power at all. The situation has rapidly deteriorated into a monopoly.”

“The new prime minister must ensure that music businesses are included in the support measures”

UK Music chief executive Jamie Njoku-Goodwin adds: “Spiralling energy costs have created an existential threat for venues and music studios. It’s urgent that government takes action to support businesses with the costs they are facing.

“We all saw just how miserable life was without live music during the pandemic, when venues were closed for months – the high cost of energy bills could now close them forever.

“The new prime minister must ensure that music businesses are included in the support measures that are brought forward to deal with soaring energy costs.

“The government should look at cutting VAT and extending business rate support to help music businesses that are fighting for their survival.”

Last week, IQ heard from a number of European arenas who also say that skyrocketing energy costs are emerging as the sector’s biggest challenge since the Covid-19 pandemic.

ASM Global’s Marie Lindqvist said the prices for electricity and gas at the company’s venues have quadrupled since the beginning of the year, with the UK being hit the hardest. Read the full story here.

 


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