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9th July 2020

UKHospitality warmly welcomes jobs and hospitality package

Written by: David Foad
The Chancellor of the Exchequer, Rishi Sunak, has announced a cut in VAT from 20% to 5% for the next six months, alongside the ‘eat out to help out’ initiative for August in measures to provide a boost the struggling hospitality sector.

Commenting on the announcement, UKHospitality chief executive Kate Nicholls said: “It is reassuring that the Chancellor singled out hospitality and tourism as a vital part of the UK’s economy and a pillar of social life around the UK. It is also good to see that Government acknowledges that our sector has been uniquely hit by this pandemic.

“Customer confidence is key to our sector’s revival and our ability to help Britain’s economic recovery. Applying every precaution to provide safe venues will count for nothing if customers are not coming through our doors. This significant VAT cut, heightened ability to retain staff and incentives for consumers to eat out together amount to a huge bonus. We hope that the UK public rightly sees it as sign that we are ready to welcome them back safely. The future of many businesses and jobs depends on it.

“The measures to support job retention and recruitment are very positive. Even after the reopening of some venues, we estimate that around 1.5 million workers in our sector are still furloughed. With revenues likely to be down for the foreseeable future, the support measures to get workers off furlough and back into work will be greatly appreciated.

“Support to retain our workforce with a retention bonus, kickstart employment and bring on trainees and apprenticeships should also be a huge boost to our sector as we begin our long recovery. Businesses have been closed for months and, with the possibility of a difficult winter ahead, support to create jobs will be vital if hospitality is to play the significant role we hope it will in helping boost the economy.

“This doesn’t mean we are out of the woods, and there are still significant challenges ahead. The biggest of these is the spectre of rent liabilities which many businesses are still facing from their closure period. Rent bills have piled up over the past few months even though venues were closed, and businesses are now facing huge rent debts with prospects for the future still in the balance. We are going to need Government support on this before too long.

“The measures announced today are extremely positive, though, and they should give many businesses in our sector much-needed help to get going again in earnest. We thank the Chancellor for recognising the importance and value of our sector, and for acting so decisively.”