Trade Associations

Hospitality industry welcomes budget package

As part of the budget, hospitality and leisure businesses will receive upwards of £18,000 as part of the government’s new restart grant scheme

The UK hospitality industry has responded warmly to the confirmation of financial support in the government’s budget for this year.

Yesterday (3 March), chancellor Rishi Sunak announced a £65bn support package for the economy as the country prepares to leave lockdown restrictions in April.

Under the new budget, hospitality and leisure businesses will be able to receive upwards of £18,000 as part of the government’s new restart grant scheme.

Noting that hospitality and tourism businesses need continued support, the chancellor also confirmed that the 5% VAT cut will now be extended until 30 September, moving to an interim rate of 12.5% until April of next year.

The raft of support measures includes the extension of the furlough scheme, which will now be extended until the end of September, as Sunak said that “protecting, creating and supporting” jobs remains his highest priority. The scheme will remain unchanged until July when the government will then ask firms to contribute 10% in August and 20% in September.

Commenting on the budget, Kate Nicholls, UKHospitality’s chief executive, said: “The chancellor has listened to the concerns of the hospitality sector. Details are yet to be poured over but it looks like crucial support will help businesses at a critical time.

“The chancellor has announced support to help our sector get back up and running, now it is vital that the Government sticks to its date of June 21st for a full reopening of the sector.”

She added: “Delay would see more businesses fail, more jobs lost and undo much of the good work the Chancellor has done to date.”

Emma McClarkin, chief executive of the British Beer and Pub Association, said: “We welcome the chancellor’s announcement of continued support for the devastated pub sector in the form of additional grants, as well as extensions to the job retention scheme, 5% hospitality VAT rate and business rates holiday.

“The new grants are worth £400m for pubs and will go some way in helping many of them survive through to the time when they can reopen and operate viably.”

She added: “It is, however, crucial that the Government ensures all pubs benefit, including those that are part of a group, by removing the current State Aid cap.

Steven Alton, CEO of the British Institute of Innkeeping, said: “With the package of support from government laid out, our pubs can begin to look to the future of their businesses once more. The extension of furlough to September will help our pubs to manage the return of their teams until they are able to trade freely again. 

“The confirmation of further reductions in business rates will allow them time to recover, but until our nation’s pubs are able to return to normal trading, the vast majority of these businesses will still be loss making.”

He added: “The extension of the VAT cut is welcomed, helping food businesses through the summer, however for our community wet-led pubs, the benefit will be extremely limited and they will not be able to trade profitably until all restrictions are removed.

“The news on further grants is positive, but in no way covers the basic running costs of our closed pubs or compensates them for the lost income over the last 12 months.”

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