Hospitality needs £35bn to save 500,000 jobs, business group claims

03-Feb-2021 - Last updated on 03-Feb-2021 at 11:02 GMT

Further aid: the Government has been urged by a variety of trade organisations to extend financial support for the sector

Related tags Finance Legislation Government Chancellor

A financial package of support worth £35bn is needed to safeguard 500,000 hospitality jobs, one business group has said.

The Independent Business Network called on the Chancellor to halve alcohol taxes, which it estimated would cost £1.8bn, include alcohol in the VAT cut (£750m) and extend the VAT reduction for the rest of this year (£6.3bn).

It also urged the Government to cut VAT rate payable by physical retailers to 14%, which would cost about £7.6bn and freeze town centre parking fees, at a cost of £872m.

In addition, the group wants the Chancellor to provide hospitality businesses with a Covid-investment rebate – which it estimated would be £690m – a continuation of the business rates holiday (£15bn), make hospitality investments 100% of the First Year Allowance (£1.15bn) in addition to reintroducing the Eat Out to Help Out Scheme with a ‘pro-hospitality’ focus (£1.08bn).

Financial oblivion prospect

Independent Business Network chairman John Longworth said: “The comprehensive £35bn package of measures we have set out here are vital to saving our pubs, restaurants and high streets from financial ruin.

“We urge the Government to adopt them and save up to 500,000 jobs and countless family-run businesses from destitution.

“Successive draconian lockdowns imposed by central Government have decimated our hospitality and high street retail sectors to the extent that many are facing the looming prospect of financial oblivion and, in some cases, irreversible decline.

"For weeks during the first lockdown the Government gave those operating in the hospitality industry the false impression that an end to lockdown would bring with it a slow but gradual return to normality."

Support for British industry

Longworth added: “Pub landlords and restaurant owners the length and breadth of the country invested in expensive PPE and other equipment to ensure social distancing and prevent the spread of the virus only to discover that, in fact, the sector would be plunged once again into closure and their equipment investment rendered redundant.

“In many cases the level of investment exceeded £10,000. The Government should step-in to provide compensation to these businesses.

“It’s time the Government shows its support for British industry and backs these measures.”