Conference and exhibition centres and the wider events industry have been excluded from the Government’s new Energy Bill Discount Scheme. However, historic buildings, museums, zoos, and other similar attractions that can hold events will qualify.
The Energy Bill Discount Scheme will begin on 1 April 2023 and run until 31 March 2024. The process is not yet finalised.
The Treasury released details on 9 January which indicates the Government has adopted a policy in which those businesses that can adapt their operating models to absorb the costs will be forced to do so. This essentially means passing increased costs along the supply chain.
The Treasury and the Department for Business, Energy, and Industrial Strategy (BEIS) has instead chosen to focus attention on what they define as ‘Energy and Trade Intensive Industries’ (ETII), such has manufacturing, and has based its approach on the Standardised Classification Code (SIC) code system.
Businesses will need to register directly with BEIS so that eligibility can be assessed. It is understood that anomalies might be considered as the scheme’s rules are further developed with more information to be published by BEIS in March.
The Government has been warned of the knock-on effect to the supply chain. If the increase in energy cost impacts an event venue which leads to closure or loss of business, the ripple effect down to the supply chain could see further business closures.
This will negatively impact the UK’s international competitiveness at a time when green shoots of international business are starting to return.
The Government said the new scheme “strikes a balance between supporting businesses over the next 12 months and limiting taxpayer’s exposure to volatile energy markets, with a cap set at £5.5bn.”
Chancellor of the Exchequer Jeremy Hunt said: “Even though prices are falling, I am concerned this is not being passed on to businesses, so I’ve written to Ofgem asking for an update on whether further action is needed to make sure the market is working for businesses.”
Events industry deemed to not be ‘trade intensive’ enough
Industry stakeholders have been in direct discussions with BEIS arguing that the events industry is indeed “energy and trade intensive”. The Government has taken the view that supporting heavy manufacturing, such as raw materials, leads to higher revenues from exports. It has been argued that business events should be considered, as 2019 figures show that the UK exported £2bn of exhibition services alone, making the sector a top-10 exporter. The inbound business tourism to the UK is vital, and increased costs could deter key markets such as the US from bringing their events to Britain.
A source told TBOE: “All in all it looks very much like the Government is wedded to businesses primarily now transitioning to accepting a high-cost energy environment and doing whatever they can to mitigate and absorb costs in their operating model.
“The hoped-for exceptions for vulnerable businesses, such as hospitality and events, are no longer the policy being pursued.”
BEIS have been asked to provide information relating to how increased energy costs might impact investment considerations in the sector.
What support is being offered to eligible businesses?
From 1 April 2023 to 31 March 2024, eligible non-domestic customers which have a contract with a licensed energy supplier will see a unit discount of up to £6.97/MWh automatically applied to their gas bill and a unit discount of up to £19.61/MWh applied to their electricity bill, except for those benefitting from lower energy prices.