News

Hospitality hopes there is another round to come yet from the Chancellor

Written by: Andrew Merrell | Posted 10 July 2020 9:16

Hospitality hopes there is another round to come yet from the Chancellor

‘Super Saturday’ has come and gone – but with many pubs reporting few bookings since that grand reopening day news that more help was afoot from the Government was welcomed.  

Chancellor Rishi Sunak had clearly been listening to the hospitality sector which has been lobbying hard for VAT to be slashed to allow significantly reduced earnings to go that bit further.  

Mr Sunak said today he would reduce the 20 per cent tax to five per cent and would also bring in a discount of up to £10 per head for those eating out on Monday, Tuesdays and Wednesdays in August. 

But many were also aghast that the VAT reduction only included VAT and soft drinks in a sector where many businesses rely almost solely on alcoholic beverages.

Justin Hudson, chairman of Gloucester LVA (Licensed Victuallers Association) and owner of Butlers and Bar 131, said: “The measures are fantastic. But many businesses are wet-led only. I was left a little open-mouthed that he has excluded such a major part of the trade.” 

An approach had already been made to speak to Gloucester MP Richard Graham and Cheltenham MP Alex Chalk to see if there were any further announcements coming down the line, as some in the trade believe. 

“To get Butlers ready and safe to open, and so I can look every member of staff and customers in the eye and say we have done our utmost, will cost me £15,000 – plus VAT,” said Mr Hudson. 

“To get some help with VAT, just until January, would be significant.”

Kieran Bates, the chairman of Gloucester BID, the city’s business improvement district group of businesses, was like-minded.  

“It is very encouraging and positive,” said Mr Bates, who manages a group of public houses in the county. “But it is a little bit disappointing the VAT reduction does not include drink (alcohol). Some parts of the hospitality are wet-trade only.”  

He knew of a number of pubs, he said, which had taken plenty of bookings on Saturday when the licencing trade was allowed to reopen, but taken almost none since – so the emphasis on encouraging customers to eat out on other days of the week was a good idea in principal.  

“We will have to look at the detail and see how effective it is,” he said.

Kevan Blackadder, BID director, Cheltenham BID, said: “It is the VAT reduction and Eat Out to Help Out scheme that are likely to do the most to help our businesses in the short-term.

“That VAT cut from 20 per cent to five per cent for hospitality businesses is a very positive step and has been widely welcomed. I’m not sure how much difference a maximum saving of £10 per head on eating out in August will make, however.

Read more: Cotswold hospitality businesses don’t like everything on Chancellor’s menu of measures 

"The idea had been widely trailed as a £500 discount for every household and the reality isn’t likely to be anything like as impactful.

“The truth is that the measures overall can’t compensate for the loss of footfall and income caused by social distancing. So in reality the VAT cut might see some savings passed on to the consumer but businesses may also have to put up some prices to protect their margins.

“I’d like to think that more long-term help will still be offered to sectors like hospitality and retail, where many businesses are still fighting for survival.

“The BID has been a long-term supporter of the #RaiseTheBar campaign, which has called for businesses with rateable values over £51,000 to be included in the Government’s grant schemes, but that still hasn’t happened.

"There is currently £1.7bn unallocated across local authorities nationwide and we’d like to see that passed on to the businesses that have missed out.”

 

Sam Holliday, FSB development manager for Gloucestershire, Bristol, Bath & South Gloucestershire, called the Chancellor’s report to Parliament “a strong and ambitious statement of intent to get business moving again and much of it is to be welcomed”.  

“There were still a few clear ‘misses’ – still nothing to help many of the self-employed who have missed out on grant support and a lack of direct help for our vital high street shops- but beyond that there was a lot of positive moves.  

“We welcome the clear emphasis on getting the jobs market moving again. Our FSB research shows many small businesses have already shed jobs or are planning to do so and by offering some respite via additional furlough transition, support for apprenticeships and traineeships and major job-creation schemes around the green agenda this should hopefully put some limited confidence back into the SME jobs market.  

“We are also very pleased with the cut in VAT for food, accommodation and tourist attraction businesses alongside the surprise ‘eat out to help out’ initiative. This should hopefully stimulate our very depressed hospitality and tourist sector which is such a key aspect for this area’s economy.    

 “As ever we await to see the full details behind these schemes but on the surface we can be encouraged that the Chancellor has addressed some of the concerns expressed by small businesses and we hope there will be more initiatives and support packages to come as our  recovery moves to the next phase.”  

Mr Sunak said: “We want to reward employers who successfully bring staff back from furlough. If you bring back someone who was furloughed - and continuously employ them through to January we'll pay you a Job Retention Bonus of £1,000 per person.”

Read more: Cotswold hospitality businesses don’t like everything on Chancellor’s menu of measures

First Published: 08-07-2020 17:53:59