01 March 2021


APPG calls for VAT cut, business rates holiday and furlough extension to support devastated sectors


In a letter signed by more than 80 MPs from right across the political divide, the All-Party Parliamentary Group for Hospitality and Tourism is urging the Chancellor to provide decisive financial support to protect sector businesses crucial to communities around the UK.


The UK’s tourism and hospitality sectors are both world leaders, but they have been devastated by the COVID crisis. Industry figures show hospitality sales plummeted 54% in 2020, equivalent to £72 billion, while 40% of accommodation and food service activities businesses have no or low confidence that their businesses would survive for the next three months.


Hospitality and tourism businesses are critical both economically and socially to communities and this is highlighted by support from across the four nations of the United Kingdom. With the reopening of the UK’s economy now in sight, it is crucial that these businesses be given the support they need to survive the remainder of the crisis and the best chance to flourish.


Some 83 MPs have written to the Chancellor ahead of this week’s Budget, for an extension to the VAT cut and business rates holiday.


An extension of the VAT cut to 5% on food and soft drinks for another 12 months and for this to be extended to the broad hospitality industry, including alcoholic drinks sold on-premise, the leisure sector and weddings 
A further 100% holiday on business rates for all sector businesses across the UK, covering the next financial year. 


The letter also calls on the Government to extend the furlough scheme, replace the Job Retention Bonus and provide improved loan repayment terms and HMRC tax deferrals to give businesses more breathing room to recover.

Co-Vice Chair of the APPG, Sally-Ann Hart MP said:


“Our hospitality and tourism sectors are some of the best in the world. They are a fantastic social as well as economic asset and we should be immensely proud of them. They have been absolutely devastated by COIVD, though. Despite unprecedented financial support from Government, unfortunately many businesses have been lost and they have taken hundreds of thousands of jobs with them. These are businesses that are critical to communities around the country. They are focal points for social lives and drive inward investment. Ongoing Government support through to the end of the pandemic and through the recovery phase is critical to rebuilding this industry and creating jobs.”


Co-Vice Chair Alison Thewliss MP said:


“Financial support at the Budget is now a must. The Chancellor needs to act positively and extend the VAT cut and the rates holiday to our fantastic hospitality and tourism sector which can help to re-grow our battered economies. Support must also be extended to workers in the hospitality and tourism sectors for the entire period that restrictions are in place.’’


Hospitality Ulster CEO, Colin Neill, said:


“We welcome the cross-party support from MPs, which is recognition of the important role hospitality plays as an economic driver in so many parts of the country. A cut in VAT and an extension of the business rates holiday are essential to help the industry recover from the Covid pandemic.”


UKHospitality CEO, Kate Nicholls, added:


“The support of so many MPs from all parties and from the four nations of the UK emphasises just how important the hospitality and tourism sectors are – and how desperately they need the Chancellor’s help at Budget. Our sectors can be the engine of recovery, rapidly creating jobs and tackling youth unemployment. The Chancellor can speed this recovery with extensions to the VAT cut and business rates holiday for the next year.”