Government urged to provide hospitality energy support

May 7, 2026

UKHospitality sets out proposals for clear, targeted measures to support the sector through increased energy costs.

In a letter to the Chancellor, UKHospitality has outlined six clear measures that the Government can bring forward to provide targeted energy support for hospitality businesses.

We are proposing:

1
Energy market stability
An obligation for energy suppliers to offer new contracts, a cap on deposits demanded by suppliers, and the avoidance of sector-specific profiling that has previously seen hospitality locked out of contracts.
2
Grants or market intervention
Fiscal support for businesses coming out of fixed-term contracts.
3
Relief on non-commodity charges
Government should keep additional costs included within energy bills, outside of unit cost of energy, to an absolute minimum.
4
No supplement to support other sectors
There should be no additional levies put on hospitality energy bills to fund support for other sectors. The current nuclear levy should be reconsidered.
5
CMA investigation
The Government should refer the business energy market to the CMA to redress already identified competition issues.
6
Cut red tape
Costly and burdensome new regulations currently under consultation should be postponed. This includes the Deposit Return Scheme, advertising restrictions and mandatory reporting requirements.

We also reiterated the need for the Government to bring down the sector’s overall cost burden.

The sector is unanimous that cutting VAT for hospitality to 10%, lowering business rates and stopping the holiday tax would be among the most effective measures to support hospitality businesses.

In the letter:

Allen Simpson, Chief Executive of UKHospitality, wrote: “Businesses within the hospitality sector are increasingly concerned about the impact of the crisis in the Middle East and how this will affect our already strained sector.

“We have been clear that hospitality is facing three consecutive challenges: the direct costs incurred from higher energy prices, higher costs passed through the supply chain and a customer base that cannot sustain raised prices.

“Fixed-term contracts are providing some short-term protection but this will fall away for many in the coming months. Rural venues are already seeing higher prices due to a doubling of the price of heating oil.

“We are urging Government to urgently pull together, in discussion with industry, targeted measures that support the hospitality sector.

“We hope that the situation will improve but Government needs to be in a position to urgently help the sector – due to the fragility of the sector, even before the crisis, caused by substantial cost increases.

“Timely intervention can reduce the risk that viable businesses are lost, preventing lasting consequences for communities across the country.”