UKH warns energy crisis will 'scar' high streets

31-Aug-2022 - Last updated on 31-Aug-2022 at 09:12 GMT

Crucial to nations recovery: hospitality sector needs help as quickly as possible to get through energy crisis according to UKH (pictured: Kate Nicholls)

UKHospitality (UKH) has called on the Government to support SMEs to avoid “persistent scarring” of UK high streets.

In a letter sent to Chancellor Nadim Zahawi and Business Secretary Kwasi Kwarteng, the trade body urged the MPs to support small businesses through the winter amid soaring energy costs, stating the hospitality sector had already had its resilience “severely strained” through the pandemic.

UKH chief executive Kate Nicholls said: “Hospitality businesses are facing a crisis this winter, with soaring costs combined with a sharp drop in disposable incomes for our customers.

Damaged social mobility

“Without support, the industry will see widespread business failure, leading to tens of thousands of job losses, persistent scarring to high streets and damaged social mobility.”

In the letter, Nicholls called on the Chancellor and Business Secretary to introduce a comprehensive package of measures to the end of March 2023 in order to “ensure the survival of businesses and continuation of employment”.

This included a business rates holiday for all hospitality premises, with no caps applied; deferral of all environmental levies; the reinstatement of HMRC Time to Pay scheme; reintroduction of a trade credit insurance scheme for energy and the reversal of the April 2022 increase in VAT for hospitality from 12.5% to 20%.

Furthermore, Nicholls stated while support had rightly been issued to households, the hospitality sector, which employs more than 2.5m people, must receive Government help to continue trading to ensure businesses and staff within the sector can continue paying their bills amid “enormous energy cost increases”.

Worsening storm

Nicholls added: “More must be done to help businesses, particularly SMEs, that are at risk of failure due to no fault of their own.

“Hospitality businesses had their resilience severely strained during the pandemic and are not able to weather the worsening storm they now face. Immediate intervention in the commercial energy market is essential to avoid dire consequences.

“Hospitality is critical to the nation’s recovery from Covid, but it needs support to get through this current crisis, and as quickly as possible.”