- Pub group attacks UK’s embrace of nuclear energy as ‘levies’ push up costs
Pub giant JD Wetherspoon sounded the alarm over the price of a pint and a meal, as it revealed it will fork out £7million on elements other than power in its electriity bill.
Wetherspoon’s has warned of higher inflation in the coming months, with new subsidies for nuclear power set to drive businesses’ energy costs even higher.
The pub group says this adds to other costs, including £60million extra from the government’s employer National Insurance rise and £2.4million from the packaging tax.
Wetherspoon’s been struggling to return to pre-pandemic levels of profitability, as soaring energy and wage costs have offset a sharp rise in sales.
It says energy and labour costs have risen 57.8 and 34.5 per cent, respectively, since 2019, while sales of over £2.1billion are up 17 per cent.
And Wetherspoon’s told shareholders on Friday the ‘non-commodity’ elements of its electricity charges will rise by £7million a year from this month.
It means these ‘levies’ will make up approximately 62 per cent of the group’s overall electricity costs.
Wetherspoon’s profitability is still behind pre-pandemic levels despite bumper sales growth
Wetherspoon’s said: ‘The increased cost is partly due to two new levies: one is a nuclear power subsidy, the other is a subsidy, as we understand it, for energy intensive industries.
‘As indicated, this substantial increase in levies, applicable to most consumers and businesses, will inevitably add to inflation in coming months.’
The Government’s spring spending review allocated £30billion to nuclear projects like Sizewell C and the push for small modular reactors, with a target of increasing nuclear capacity from 6.5 gigawatts to up to 24GW by 2050 – potentially supplying 25 per cent of national electricity demand.
Britain is not alone in re-embracing nuclear power, with countries around the world ramping-up spending on the technology to provide cleaner and cheaper sources of energy.
However, Wetherspoon’s criticised what it called an ‘absence of public debate about energy policy’, noting the ‘colossal amount of resources’ the push will require and questioning ‘the assumption that nuclear energy is cleaner’.
It said: ‘The principal area for public debate is twofold: is nuclear energy really cleaner and what is the financial cost of transition.
‘It is clearly high time for the UK to engage in a proper debate on these vexed issues, rather than the current tit for tat political discourse, financed, inadequately and temporarily, by huge stealth taxes.’
Chairman Tim Martin also highlighted a levy on packaging, which he says will cost the group £2.4million in the current year, as well as a £60million increase in labour costs owing to Labour’s living wage and employer national insurance contribution hikes.
He added: ‘Cost increases such as these will undoubtedly add to underlying inflation in the UK economy, although Wetherspoon, as always, will endeavour to keep price increases to a minimum.’
It came as Wetherspoon’s, which operates nearly 800 pubs across the UK, posted a 5.1 per cent increase in like-for-like sales over the year to 27 July at £2.13billion
Pre-tax profits jumped by 10.1 per cent to £81.4 million for the year.
Martin added: ‘In the last financial year, Wetherspoon, its customers and employees generated a total of £838million of taxes for the UK government.
The total tax raised by the government in the last financial year was £858.9billion.
‘Therefore, Wetherspoon generated approximately £1 in every £1,000 of all UK tax revenue. In other words, the country only needs about one thousand companies like Wetherspoon and no one else would have to pay any taxes at all.
‘Wetherspoon is confident that it will provide more tax revenue for the government in the current financial year, while aspiring to increase earnings per share at the same time.
‘The company currently anticipates a reasonable outcome for the financial year, although government-led cost increases in areas such as energy may have a bearing on the outcome.’
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This article was originally published by a www.dailymail.co.uk . Read the Original article here. .