Sector reacts to Sunak’s summer statement

The hospitality sector has widely welcomed the series of measures announced by the chancellor in his “summer statement” yesterday, with UKHospitality saying it is “reassuring” that he singled out hospitality and tourism as a “vital part” of the UK’s economy.

Yesterday (8 July), along with a £9bn retention scheme that will see companies paid £1,000 bonus per employee for those they keep on until January on part pay, Rishi Sunak revealed VAT for the hospitality sector in food, accommodation and attractions will be cut from 20% to 5% until 12 January.

In addition, he announced the ‘Eat out to help out’ scheme, which will provide everyone with a 50% discount to use in participating restaurants of up to £10 a head and is set to begin in August.

Supporting the announcements, UKHospitality chief executive Kate Nicholls said: “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 a sign that we are ready to welcome them back safely. The future of many businesses and jobs depends on it.”

Although she warned that it doesn’t mean the sector is “out of the woods”, and there are still “significant challenges” ahead. The biggest of these she explains is the spectre of rent liabilities which many businesses are still facing from their closure period. “We are going to need Government support on this before too long,” Nicholls added.

Howard Hastings, managing director of Hastings Hotels said the group is “very much welcoming” the measures adding it is already updating its rates to encourage visitors. It also revealed it will now open its Europa Hotel earlier than planned on August 1.

He said: “These measures will go a long way in helping the local economy recover in the coming weeks and months ahead and will hopefully encourage more people to visit restaurants and book a staycation this summer. We hope this will also give an extra incentive to visitors from the UK to book a visit to Northern Ireland this summer as it certainly adds extra value to what we already offer.

“With the increased demand we hope these measures will generate, we will now re-open the Europa Hotel for accommodation earlier than planned on Saturday 1st August.’’

In addition, The British Beer & Pub Association (BBPA) praised the “first step on the road to recovery” but warned that “more financial help will be required to help thousands of community pubs where food is not a focus, as well as the nation’s 2,000 breweries.”

The trade association said the sector-specific VAT cut, which it had called for, would be a “huge boost” for pubs that serve food and offer accommodation, and would also help compensate for an expected long period across Summer and beyond of reduced sales and revenue compared to before lockdown.

It also said the chancellor’s ‘eat out to help out’ scheme will “help encourage” pub goers back to their local pubs where they offer food. However, for those pubs where revenue is more drinks led, the announcement today “provides less help”, the BBPA said.

Emma McClarkin, chief executive of the BBPA, said: “The pub and brewing sector has huge potential to create thousands of new jobs and employ more people, but to do this it needs to be thriving, not just surviving. This will require more support in the medium term directed at all pubs and brewers so they can help lead with the economic recovery.

“These measures include a significant cut to beer duty to bring the UK in line with other European countries who pay far less tax on beer, and a fundamental review of the business rates system so that pubs no longer pay an unfair share of them.”

She added: “Such measures will ensure our pubs thrive and continue to bring together people from all walks of life as they have done for centuries. We look forward to these measures being announced in the Government’s planned rebuild phase.”