Industry leaders write to PM for support
A letter from leading hospitality companies has been sent to the prime minister.
A letter signed by 100+ CEOs from leading hospitality and leisure companies has been sent to the prime minister.
Co-ordinated by UKHospitality, the letter requests further financial support for the sector, following the recent Plan B announcement and subsequent booking cancellations witnessed across the industry.
Three key points of support have been highlighted in the correspondence. First, for government to prolong the reduced rate of VAT until at least the end of 2022. Second, to suspend business rates for Q1 2022 for all hospitality businesses and agree to review the 2022/3 cap. Finally, to introduce new grants to compensate for a lack of trade from government intervention – in line with the 'open' business grants in autumn 2020.
The full letter reads as follows:
Maintaining the recovery of the hospitality sector
Dear Prime Minister,
The announcement of Plan B this week will bring the hospitality sector’s recovery to a shuddering halt, at such a critical trading period for our businesses. Coming into December, prior to the emergence of the new variant, Christmas bookings were 9% lower than expectations. The week after the announcement saw sales drop around 12% - with future Christmas bookings also down 12%. With each Government announcement consumers are becoming more risk averse.
In a subsequent member survey, we also asked businesses what impact the introduction of the Government’s “Plan B” would be. Respondents reported an average anticipated decline of 28%. With a significant increase in costs, the sector is being pushed beyond the point of viability. Anecdotal evidence suggests that recovery will be severely dented and could be pushed back by 3-6 months and investment is being held back, both in communities and through the undermining of investor confidence in the sector as a whole. As it stands we will not start to recover until Q2 2022, just at the time when a whole raft of new costs hit the sector.
We appreciate that Government has taken a nuanced approach towards pubs and hospitality – with no requirement for face coverings for the majority of the sector and only limited application of Covid passes at this stage.
However, a dip in consumer sentiment hits our sector the hardest and earliest as a discretionary activity. This is demonstrated by the numbers above.
As a sector we will continue to make sure that the potential for transmission in our venues is minimal, as it has been throughout the pandemic, as demonstrated by businesses voluntarily reintroducing protective measures. We maintain the highest standards through compliance with Government workplace guidance and much more, reflected by less than 2% of covid-infections being traced to hospitality venues.
Considering the measures, we have taken, and the financial hit that we will take from these restrictions, we believe Government needs to step in and provide support again. We have worked extensively with BEIS on a recovery strategy that highlighted the huge cost pressures businesses are facing – from labour to energy price rises to insurance costs and more – as well as acute labour shortages that have continue to inhibit our trading.
To ensure that businesses can survive the first quarter of 2022 and to ensure we can contribute towards the nation’s economic recovery, the Government must:
- Prolong the reduced rate of VAT until at least the end of 2022 – ahead of a review into a permanent reduction
- Suspend business rates for Q1 2022 for all hospitality businesses and agree to review the 2022/3 cap
- Introduce new grants to compensate for a lack of trade from Government intervention – in line with the “open” business grants in Autumn 2020 – this could include unspent Additional Restrictions Grant
With no furlough as a backstop there is a real concern about the sustainability of jobs in the sector, particularly for businesses based in city centres where the work from home message will hit hardest. Events and office catering will take a significant hit, too. We are keen to work with Government to provide targeted security for jobs in the sector.
As you know there is extreme fragility in the sector and losing a critical trading period, ahead of a traditionally dormant January and February, could be terminal for thousands of businesses – that have never before considered themselves unviable. This risks tens of thousands of job losses and is likely to hit northern communities and city centres the hardest. This must be avoided at all costs if we want to ensure the recovery of hospitality, employment and our high streets.
Finally, we urge Government to continue to make clear that whilst following the new guidelines, customers can continue to visit their local pubs this Christmas to spend quality time with friends and family.