The sheer number of people facing fuel poverty and the horrendous choice between feeding families and paying for heating is terrifying. But what mustn’t happen is that we forget what makes the cogs of the economy turn. This is not a choice between either helping businesses or helping families. It’s about helping both. When businesses close their doors, workers lose their jobs, the local economy suffers and even more people are left struggling to make ends meet.
Once again, we are witnessing a short sighted approach to a crisis, devoid of any planning or long-term economic strategy, and as a result, our hospitality sector is heading towards absolute disaster.
Operators simply cannot wait another few months for support, and I’m more concerned about the industry now than I was in lockdown. While the rates relief outlined in the Chancellor’s Spring Statement are helpful, they do not counter the stark and difficult trading conditions the industry is currently facing, such is the looming perfect storm.
Hikes in supplier costs are pushing hospitality businesses towards the wall and heaping overwhelming pressure on operators still recovering from the pandemic. On top of inflation at 9% and energy bills at an all-time high, hospitality firms are now also having to repay the loans and tax deferrals that were the cost of staying afloat over the last two years. And as the cost of living spirals out of control, all the economic data suggests that consumer spending is falling, a trend that will most likely continue as people tighten their belts.
You don’t need to be an economist to know that as working people feel the pinch in their pockets, they will cut back on going out. As always, the pubs, restaurants and venues will be the first to suffer as consumer demand drops, especially so in the most deprived areas.
Sky high inflation together with faltering demand is a toxic cocktail for hospitality, and when faced with weak growth and a dire outlook for the future, business confidence falters and investment suffers – a vicious circle that must be addressed urgently.
We can’t afford to wait another few months, for the simple reason that it will be too late by then for many businesses. Instead of warm words or promises for future support, we need urgent, practical business help from the Government now.
On top of the overdue windfall tax on oil and gas company profits to fund support for those most in need, we also need to be looking at providing targeted support for hospitality operators who are struggling to stay afloat, for example through a temporary reduction on VAT on business energy bills, and support payments dependent on the size of firms, the nature of their business and therefore how vulnerable they are to soaring bills.
I’d also like to see the Chancellor bring forward the cut in beer duty that is currently planned for next year or, we face a very real possibility that some pubs won’t be around to benefit from it.
Owners of pubs and restaurants are telling me that their landlords are now hiking rents to reflect inflation, so a cap on rent rises for hospitality until we get through this crisis will help firms weather the storm and keep their heads above water. Likewise, extending the temporary business rates relief to cover retail and larger hospitality venues will keep the wolf from the door and support our town centres.
We are in a moment of acute danger for the hospitality industry, and as is the case in any crisis, speed is of the essence. We simply do not have time to wait months for the promise of support further down the road. The cost of more delay will be paid in shuttered businesses, lost jobs and lasting damage to our communities.