UK farm faces $17 million bill for natural gas as huge rises in energy costs threaten hundreds of thousands of jobs

peppers
Peppers are often grown in greenhouses heated by natural gas.
  • A UK farm is facing a $17 million natural gas bill as energy prices soar across Europe. 
  • British businesses are exposed to massive increases in natural gas price rises this winter. 
  • About 500,000 UK jobs are at risk because firms can't afford the costs, according to some estimates.

A UK farm faces a $17 million annual bill for the natural gas needed to heat its greenhouses as soaring energy bills put hundreds of thousands of jobs under threat.

Jimmy Russo, director of Valley Grown Nurseries in Nazeing, Essex, just north of London, said his natural gas bill was likely to rise from £900,000 ($1.1 million) to £14.6 million ($17.2 million). That would be nearly triple his expected sales of £5 million ($5.9 million) for his produce of peppers, tomatoes, cucumbers and aubergines.

"Without government support, we will have to make our 130 staff redundant and walk away," Russo told the newspaper. "I am seriously concerned for the future of British growing."

Tens of thousands of jobs are under threat as huge rises in energy bills forces bars, restaurants and hotels to contemplate closing for part of the week or even shut their doors entirely this winter.

Kate Nicholls, chief executive of lobby group UKHospitality, told The Sunday Times that up to 10,000 businesses could shut over the next 18 months, putting more than 500,000 jobs at risk in hospitality and its supply chain alone.

Vladimir Putin's decision to invade Ukraine and restrict supplies to Europe means natural gas prices have soared in around the world. 

British consumers are facing an 80% increase in bills for natural gas and electricity to an average of £3,549 ($4,200) a year. The figure could even jump as high as £7,263 ($8,500) next April, according to energy consultancy Auxilione.

While household bills are subject to a price cap set by the energy regulator Ofgem, UK businesses have no such protection, meaning price rises are technically limitless when existing contracts expire. 

There is not yet a clear plan to help consumers and businesses cope following the resignation of Boris Johnson as prime minister. Liz Truss, the foreign secretary who is likely to replace Johnson, has vowed not to offer government "handouts", but many commentators say she will have no choice but to change tack.

In an interview with The Guardian, Daniel Mussard, the owner of the eight-bedroom Bennachie Lodge hotel near Aberdeen, Scotland, said it may be cheaper to close the hotel this winter rather than heat rooms for guests, as his bills jump from £2,780 ($3,300) to more than £6,000 ($7,000).

"It is the prospect of it costing more to run than we make that is a real and imminent concern which simply means we make less of a loss by closing the doors."

The owners of The Rose and Crown pub in Bebington, near Liverpool, England, tweeted that it was facing an annual energy bill of more than £60,000 – a sixfold increase since May.

In another tweet the owners told Johnson: "I know you're out of a job in a few days, but do you or @trussliz have any plan for how to combat these energy prices?"

Another business that operates about 20 pubs and employs about 400 people in the southeast of England told The Sunday Times that its energy bill would jump fourfold to £2 million ($2.3 million). "Our company does not make anywhere near the amount of profit to be able to do that." 

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