UK: A £5 billion scheme to support hospitality businesses and high street shops has been announced by chancellor Rishi Sunak ahead of the 2021 Budget this Wednesday.
The grants could be worth as much as £18,000 per firm, and will help businesses reopen across England as lockdown restrictions are eased. Non-essential shops and outdoor hospitality will be allowed to reopen from 12 April at the earliest.
The scheme is expected to help nearly 700,000 hotels, restaurants, shops, hair salons, gyms and other businesses. Grants are to be directly distributed to firms by local authorities from April onwards, and is set to replace the current monthly grant system.
Speaking to the BBC’s Marr show, Sunak said “there’s more to come” on Wednesday’s Budget announcement.
A letter from the All-Party Parliamentary Group (APPG) for Hospitality and Tourism has been signed by more than 80 MPs to provide financial support for the sector.
Figures show that hospitality sales dropped by 54 per cent in 2020, equivalent to £72 billion. 40 per cent of accommodation and food services have no or little confidence that their businesses would survive for the next three months.
The letter calls for an extension of the VAT cut to five per cent on food and soft drinks for another 12 months, and for this to be broadly extended to include alcoholic drinks on premises as well as weddings and the leisure sector. It also asks for a further 100 per cent holiday on business rates for all sector businesses covering the next financial year.
Co-vice chair of the APPG, Sally-Ann Hart MP, said: “Our hospitality and tourism sectors are some of the best in the world. They are a fantastic social as well as economic asset and we should be immensely proud of them. They have been absolutely devastated by Covid, though. Despite unprecedented financial support from government, unfortunately many businesses have been lost and they have taken hundreds of thousands of jobs with them. These are businesses that are critical to communities around the country. They are focal points for social lives and drive inward investment. Ongoing government support through to the end of the pandemic and through the recovery phase is critical to rebuilding this industry and creating jobs.”
Co-vice chair Alison Thewliss MP, added: “Financial support at the Budget is now a must. The chancellor needs to act positively and extend the VAT cut and the rates holiday to our fantastic hospitality and tourism sector which can help to re-grow our battered economies. Support must also be extended to workers in the hospitality and tourism sectors for the entire period that restrictions are in place.’’
UKHospitality CEO, Kate Nicholls, said: “The support of so many MPs from all parties and from the four nations of the UK emphasises just how important the hospitality and tourism sectors are – and how desperately they need the chancellor’s help at Budget. Our sectors can be the engine of recovery, rapidly creating jobs and tackling youth unemployment. The chancellor can speed this recovery with extensions to the VAT cut and business rates holiday for the next year.”
Hospitality Ulster CEO, Colin Neill, added: “We welcome the cross-party support from MPs, which is recognition of the important role hospitality plays as an economic driver in so many parts of the country. A cut in VAT and an extension of the business rates holiday are essential to help the industry recover from the Covid pandemic.”
Last week, another letter was signed by over 200 businesses and trade bodies representing the UK’s hospitality and pub sectors calling for emergency fiscal support. The letter highlights that two-thirds of businesses will not be able to survive until the end of May unless a funding package is announced at the Budget.