# UK consumer industries warn curbing energy support will hit demand Author: Pal Sinha, Barnali Author URL: https://financedigest.com/author/pal-sinha-barnali Published: 2022-10-17 Category: NEWS Category URL: https://financedigest.com/category/news Meta Title: Worries Rise over Impact of UK Government's Energy Meta Description: As the new finance minister introduces austerity measures, Britain's retail and hospitality sectors brace for impact. Find out more here. URL: https://financedigest.com/uk-consumer-industries-warn-curbing-energy-support-will-hit-demandhtml ![undefined](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/2022-10-17t140103z2lynxmpei9g0kkrtroptp4health-coronavirus-britain-1736815008645-compressed.jpg) LONDON (Reuters) – The mood among Britain’s beleaguered retail and hospitality industries darkened on Monday on fears new finance minister Jeremy Hunt’s move to rein in a vast energy subsidy plan and reverse planned tax cuts would further dent demand. A two-year energy support scheme for households and businesses, expected to cost more than 100 billion pounds ($113 billion), will now end in April and be replaced by a more targeted scheme that will “cost the taxpayer significantly less than planned”, Hunt said. That move, a decision to reverse an income tax cut planned from April 2023 and an expectation that interest rates will rise further, exacerbated worries about consumer demand in Britain, where confidence levels are already at record lows. If energy prices remain anywhere near where they are now then expect carnage in household and [business finances from spring](https://www.financedigest.com/6-ways-to-spring-clean-your-business-finances.html "6 ways to Spring clean your business finances") next year,” Shore Capital analyst Clive Black said. UKHospitality, which represents over 730 companies operating around 85,000 venues, said the hospitality sector had been devastated by the [energy crisis](https://www.financedigest.com/europes-spend-on-energy-crisis-nears-800-billion-euros.html "Europe’s spend on energy crisis nears 800 billion euros"). It’s [essential that the government continues to work](https://www.financedigest.com/working-with-banks-essential-tips-for-fintechstartups.html "Working with banks – essential tips for fintechstartups") closely with the sector as part of its review into (energy) support post-April 2023,” CEO Kate Nicholls said. She again called for urgent [reform of Britain’s](https://www.financedigest.com/explainer-how-britain-is-exploiting-brexit-to-reform-finance.html "Explainer-How Britain is exploiting Brexit to reform finance?") “not fit for purpose” business rates system. Michael Kill, CEO of the Night Time Industries Association, said Hunt’s statement has “critically compromised thousands of [businesses and workers across](https://www.financedigest.com/fintechs-support-of-ukraines-digital-businesses-can-be-used-as-blueprint-across-the-world.html "Fintech’s support of Ukraine’s digital businesses can be used as blueprint across the world") our sector. He said his [industry was now “facing](https://www.financedigest.com/embattled-insurance-industry-faces-extreme-challenge-according-to-extensive-global-report-on-ifrs-17-readiness.html "Embattled Insurance Industry Faces Extreme Challenge According To Extensive Global Report On Ifrs 17 Readiness") one of the toughest winters in history. The [British Beer and Pub Association criticised Hunt’s reversal of an alcohol duty](https://www.financedigest.com/indias-carmakers-back-zero-duty-on-limited-british-imports-under-trade-deal-sources.html "India’s carmakers back zero duty on limited British imports under trade deal – sources") freeze as “a huge blow. It would have delivered a 300 [million pound](https://www.financedigest.com/uk-gives-bbc-world-service-20-million-pounds-to-support-english-language-broadcasting.html "UK gives BBC World Service 20 million pounds to support English language broadcasting") saving when we desperately need any relief we can get,” it said on Twitter. Hunt was also criticised for reversing a decision by his predecessor Kwasi Kwarteng to bring [back sales tax](https://www.financedigest.com/3-options-to-consider-when-you-owe-the-irs-back-taxes.html "3 Options to Consider When You Owe The IRS Back Taxes") (VAT) free shopping for overseas visitors. Paul Barnes, CEO of the Association of [International Retail](https://www.financedigest.com/route-genie-partners-withnorsk-global-to-provide-retailers-with-increased-international-carriage-choice.html "Route Genie Partners WithNorsk Global To Provide Retailers With Increased International Carriage Choice"), called it a “hammer blow” to UK tourism and the British high street. This short-sighted move is based on inaccurate and incomplete projections, and risks putting a brake on the return of [international visitors who are vital drivers of economic](https://www.financedigest.com/credit-squeeze-biggest-threat-to-economic-outlook-fidelity-international-says.html "Credit squeeze ‘biggest threat’ to economic outlook, Fidelity International says") growth throughout the UK,” he said. The [British Retail](https://www.financedigest.com/valentines-day-spending-boosts-british-retail-sales-in-february-brc.html "Valentine’s Day spending boosts British retail sales in February – BRC") Consortium (BRC) also said it was disappointed by the move. This decision leaves the UK as one of the only European [countries not to provide a tax-free shopping scheme to encourage tourism,”](https://www.financedigest.com/tourism-revenues-on-the-mend-in-mediterranean-countries.html "Tourism revenues on the mend in Mediterranean countries") Tom Ironside, the BRC’s director of business & regulation said. Britain’s manufacturers association said business was still in shock at the past month’s [political and markets turmoil, with a long road to recovery ahead to restore the country’s political and economic](https://www.financedigest.com/uae-plans-long-term-economic-ties-with-israel-despite-political-strains.html "UAE plans long-term economic ties with Israel despite political strains") credibility. If government is really serious about boosting growth at national and regional level, given the scale of the economic [challenges we face](https://www.financedigest.com/under-saved-and-underprepared-women-face-challenges-saving-for-retirement.html "UNDER-SAVED AND UNDERPREPARED: WOMEN FACE CHALLENGES SAVING FOR RETIREMENT"), it is more vital than ever it works with business on a long-term plan for the economy,” Stephen Phipson, Chief Executive of Make UK, said. ($1 = 0.8846 pounds) (Reporting by James Davey; additional reporting by Sarah Young) --- This blog is powered by Superblog. Visit https://superblog.ai to know more. ---