2nd December 2020

Support for hospitality falls short of minimum required, says UKHospitality

Written by: Edward Waddell
Trade body UKHospitality has warned the Government’s support for the hospitality industry is short of the minimum required to save businesses and prevent further unemployment.

In response to the announcement of a one-off payment of £1,000 for pubs not serving food, UKHospitality has criticised the Government’s restrictions which it says ‘unfairly target hospitality’.

The new restrictions will see 98% of the hospitality sector in either Tier 2 (77%) or Tier 3 (21%) close, leading to an estimated drop in trade for the whole of December of £7.8Bn.

UKHospitality is calling for:

  • Urgent, targeted replacement of the Job Retention Bonus (JRB)- the removal of this policy alongside the extension of the furlough scheme left a £2.1Bn black hole in the finances of hospitality businesses.
  • Extension of the rent debt moratoria- This will prevent landlords evicting hospitality businesses and issues of winding up orders.
  • Compensation of businesses for losses- This could amount to a proportion of the drop in sales compared to 2019.
  • Extension of the current VAT cut

Kate Nicholls, chief executive of UKHospitality, commented: “The Government’s entire approach to this lacked any sliver of logic, as evidenced by the farcical debate around Scotch eggs over the past 24 hours. There needs to be a much clearer and supportive approach from the Government and this means providing far more support immediately.

“The new tier system condemns nine out of ten hospitality businesses to being unviable by the New Year. This is not just a threat to community wet led pubs but also neighbourhood restaurants independent hotels, nightclubs and other hospitality venues who are now staring failure in the face. The sector will lose £8bn of revenue in December and bear £0.3bn of costs of closure and restricted trading.

“The Prime Minister himself said that he was asking hospitality to bear a disproportionate burden to allow the reopening of all other parts of the economy and pay for our festive bubbles but the compensation is derisory. It is vital that they bring forward a more comprehensive package of emergency and long-term support to stave off the collapse of the 3rd largest sector and export earner - a sector vital to our economic recovery."