UKHospitality chief calls on chancellor to deliver longer-term economic certainty for stricken sector

Published by Rhys Taylor-Brown on January 9th 2021, 1:01pm

While many businesses will be relieved by chancellor Rishi Sunak’s announcement of further financial support this week, the hospitality industry has warned that more action is needed to ensure longer-term viability.

Thanks to the chancellor’s newest measures, businesses in the retail, hospitality and leisure sectors will receive a one-off grant worth up to £9,000 per property to help operators survive up to the spring. A £594 million discretionary fund has also been set aside to support other affected businesses.

The support came after prime minister Boris Johnson ordered a third national lockdown in England, keeping these businesses closed until at least the middle of February.

The new lockdown dealt a blow to an already stricken hospitality industry, with sector operators such as Seacote Caravan Park in St Bees, Cumbria, having recommenced bookings and opened all three of its caravan parks to holidaymakers from December 2, 2020, only to now find themselves putting plans on hold once more.

Yet, the chancellor’s new package will offer some relief to this latest setback. With the Seacote business managing a total of 600 static caravans across its holiday parks and the Seacote Hotel - which boasts 70 rooms and a large function room - the company is one of the many that is eligible for the latest raft of support.

Announcing the new measures, the chancellor said: “The new strain of the virus presents us all with a huge challenge - and whilst the vaccine is being rolled out, we have needed to tighten restrictions further.

“Throughout the pandemic we’ve taken swift action to protect lives and livelihoods and today we’re announcing a further cash injection to support businesses and jobs until the spring. This will help businesses to get through the months ahead - and crucially it will help sustain jobs, so workers can be ready to return when they are able to reopen.”

Despite acknowledging that the latest support package from the Treasury constitutes a positive step to keep businesses afloat in the short-term, UKHospitality chief executive Kate Nicholls insisted that further measures, including an extension to the business rates holiday and the five per cent VAT rate, would be needed to keep the sector going.

Nicholls said: “This is obviously a very positive step to keep businesses afloat in the immediate term and, for that reason, must be welcomed. The chancellor has rightly recognised the costs imposed on hospitality businesses by enforced closures and the need for additional support. It is also encouraging that the discretionary grants address the suffering in the supply chains upon which our sector is reliant.

“However, while this announcement is most welcome, make no mistake that this is only a sticking plaster for immediate ills – it is not enough to even cover the costs of many businesses and certainly will not underpin longer-term business viability for our sector.

“To address the inevitable and existential challenges that hospitality faces, we need confirmation of extensions to the business rates holiday and of the five per cent VAT rate.”

Nicholls added that the sector needed to be privy to a longer-term economic plan to ensure certainty and suggested that the chancellor bring the Budget forward to allow businesses properly plan for the future.

“On its own, today’s support is not enough. Businesses need a longer-term economic plan and it would befit the crisis that we face if the chancellor brought forward his Budget to make the announcements necessary to reassure businesses and allow them to plan their survival.

“Commercial certainty cannot come soon enough and only the chancellor can deliver it.”

Photo by CHUTTERSNAP on Unsplash

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