URGENT CLARITY NEEDED ON ENERGY AND WIDER SUPPORT TO SAVE HOSPITALITY BUSINESSES

20 September 2022

We have written to the Chancellor alongside other trade bodies in GB to highlight the urgent need to support hospitality businesses in the face of spiralling energy costs, soaring costs of doing business and consumer downturn - VAT and rate relief essential.

Leaders of trade bodies representing pubs, brewers, bars, restaurants and hotels have written to the Chancellor ahead of the fiscal statement later this week warning that a lack of clarity on energy package could be fatal for businesses.

In a letter to Kwasi Kwarteng, representatives from across the hospitality industry called for urgent clarity on the energy cap for businesses and wider support and a long-term plan to secure the future of the sector and save businesses and jobs across the UK.

They warned that business owners were making decisions now about whether they could survive the winter, and simply could not wait any longer to understand whether they should sign new contracts or not.

The letter came as No 10 said information on energy support for businesses would be announced in the fiscal statement but payments might need to be backdated to October.

The trade associations also urged the Government to think beyond the next six months, noting that ‘whilst the energy cap will be a critical lifeline and stem the situation over the next six months…more is needed to ensure businesses can head into winter knowing they have the chance to not only survive but thrive again’.

They called on the Chancellor to bring forward the following measures to support the industry both now but also looking to the longer-term:

• an immediate reduction on VAT on all food and drink sales across hospitality
• cancellation of business rates for the remainder of this fiscal year for all hospitality businesses regardless of size

In addition, the bodies stated that the regulatory burden placed on the sector needed to be eased, noting how upcoming Alcohol Duty and business rates reform had the potential to further reduce taxes on an already fragile sector.

In a joint statement industry leaders, which includes Colin Neill, Chief Executive of Hospitality Ulster, said:

“An energy price guarantee for business will provide some short-term relief for businesses on the brink of closure, but more support is needed, as well as a plan beyond the next six months. The initial announcement helped businesses breathe an initial sigh of relief, but most are still in the dark as to how the guarantee might help them.”

“Our industry is one of only a few that supports jobs and livelihoods in every single part of the UK, and we have the potential to deliver growth in every single community we serve, but we’re being held back. We need policies that ensure our survival through the winter which will allow us to invest in the long-term potential of our sector, action on the tax burdens that are stunting our growth and a government that understands the extremely critical situation we’re currently in.”

To read the full letter, please see: HERE.