Treasury urged to extend support as sector stares 'into the abyss'

01-Feb-2021 - Last updated on 01-Feb-2021 at 10:24 GMT

'Battling for survival': UKHospitality's Kate Nicholls says hospitality can drive future economic growth if supported through lockdown

Pubs have been left “battling for survival”, UKHospitality’s Kate Nicholls has said after imploring the Treasury to extend critical support for hospitality businesses.

The trade body gave evidence to the Treasury Select Committee Inquiry into the Economic Impact of Coronavirus, highlighting the dire situation faced by many operators.

Four in 10 hospitality businesses believe they will fail by the middle of the year, according to UKHospitality (UKH).

What’s more, just one in five has enough cash flow to survive beyond this month with existing levels of support.

Support needed

Britain's hospitality venues lost nearly £200m a day in sales in 2020, according to data from UKHospitality and CGA.

The Treasury has been pressed to extend the VAT cut to 5% for an additional 12 months and introduce a further business rates holiday for 2021/22.

Operators told The Morning Advertiser the VAT reduction had represented the survival of their businesses and given them a reason to keep going.

UKHospitality chief executive Kate Nicholls said with the “right conditions and support” in place the sector could be “justifiably optimistic” of its ability to drive the country’s economic revival.

Nicholls added: “The VAT cut and business rates holiday were two key measures that Government correctly identified in 2020 that would stimulate economic activity and assist businesses. With subsequent lockdowns and restrictions many in hospitality have been unable to recoup the intended benefits.

Battling for survival

“Extending these measures would act as a critical revival system – saving many jobs and setting up the economy for much need job creation for the rest of the year.”

“Put simply, hospitality is battling for survival. Our sector has been the hardest hit sector by the pandemic and is staring into the abyss," she added.

The Scottish Government announced a three month extension of full relief on non-domestic rates and pleaded Chancellor Rishi Sunak to fund a further extension.

Chief executive of the Scottish Beer & Pub Association and the British Beer & Pub Association, Emma McClarkin, called on the Chancellor to facilitate further support for pubs.

She said: “Businesses across the country are facing a cliff edge when the rates holiday ends in March. They need reassurance now, in this third lockdown, that the Government still has their back and is invested in them – as the Scottish Government has done."