Hospitality chiefs cautiously welcome ‘crucial’ Budget support measures

Chancellor Rishi Sunak extended business rates support, the VAT reduction for hospitality and froze alcohol duty.

Worker in pub
Worker in pub

Hospitality bosses have cautiously welcomed “crucial” VAT and business rates support from the Government but warned there is still a long road to recovery for the sector.

Chancellor Rishi Sunak said in his Budget announcement the recent VAT cut to 5% for parts of the sector will be extended for six months before being tapered.

Hospitality firms will also benefit from a three-month extension of the business rates holiday, which will then be a two-thirds discount up to £2 million per business.

Pubs, cafes, restaurants and hotels are among venues which are currently shut in the face of nationwide lockdown restrictions.

Venues will be able to reopen outside spaces from April 12 at the earliest, with plans for indoor openings from May 17, with some restrictions still in place before a full reopening from June 21 at the earliest.

Kate Nicholls, chief executive of the UKHospitality trade body, hailed the support measures but stressed the importance of sticking to the Government’s current road map out of lockdown.

She said: “Details are yet to be pored over but it looks like crucial support will help businesses at a critical time.

“The Chancellor has announced support to help our sector get back up and running, now it is vital that the Government sticks to its date of June 21 for a full reopening of the sector.

“Delay would see more businesses fail, more jobs lost and undo much of the good work the Chancellor has done to date.”

Peter Borg-Neal, founder of Oakman Inns, tweeted it was “all in all a positive budget for hospitality”.

(PA Graphics)
(PA Graphics)

However, he added: “Concern remains for those industry colleagues who are badly exposed to rent debt. We also need the VAT cut to be made permanent.”

Shares in pub companies also moved higher on Wednesday as investors appeared to welcome the financial support, with Wetherspoon, Mitchell & Butlers and Whitbread all rising more than 5%.

Emma McClarkin, chief executive of British Beer & Pub Association, said: “We welcome the Chancellor’s announcement of continued support for the devastated pub sector in the form of additional grants, as well as extensions to the job retention scheme, 5% hospitality VAT rate and business rates holiday.

“However, this is just the start of the journey on the hard road to long-term recovery for our sector.”

The Chancellor also confirmed that alcohol duty will be frozen for a second consecutive year although the sector has urged for further support in the long-term.

Paul Davies, chief executive officer of the Carlsberg Marston’s Brewing Company, said: “Confirmation of a freeze in beer duty will help support brewers and pubs on the long road to recovery and, importantly, recognises the vital role that beer and brewing plays in the UK economy, including creating jobs, supporting local communities and our Great British pubs.

“But more will be needed and ongoing financial support directly targeted at the brewing industry will be essential if our industry is to recover financially from the last 12 months.

“We also remain hopeful that the Government will review beer duty within the alcohol duty review to further support brewers and pubs.”

Coronavirus – Mon Oct 12, 2020
Guinness maker Diageo welcomed the freeze in alcohol duty (Peter Byrne/PA)

Dayalan Nayager, managing director of Diageo Great Britain, said: “We thank the Chancellor for providing much-needed stability by freezing alcohol duty.

“The last year has been incredibly tough and today’s decision, along with other measures to help the trade, gives the industry confidence to meet the ongoing challenges in these critical last months before reopening.

“We now look ahead to the alcohol duty review and welcome the opportunity to work with Government to bring greater fairness to the duty system and spirits producers across the UK.”

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