As the Government reviews evidence to inform the lifting of social distancing earlier than 19th July, UKHospitality has called for the Government to factor in mounting costs in the sector as a consideration and to consider a range of mitigation measures.
The trade association has highlighted how the delay in lifting restrictions risks further business failures via unsustainable accrued debts, as well as compounding problems in an already challenging labour market.
From this week hospitality businesses will have to restart business rates payments, have to contribute to furlough salary costs and face VAT repayments.
Speaking ahead of the Parliamentary statement on reopening today, UKHospitality CEO, Kate Nicholls, said “Given the delay to ‘Freedom Day’ Government should look again at the support measures in place for the sector. A delay of four weeks – after 15 months of restricted or no trading – feels like a lifetime for struggling hospitality businesses, as costs continue to mount. During what should be a peak trading period, we remain severely restricted, or, in some cases, forcibly closed. The knock-on impact will be felt throughout the summer.
“An immediate extension of the business rates holiday would settle some commercial concerns but we would still then face employment costs that threaten jobs. Following clear and confident assurances that restrictions would be lifted on 21st June, hospitality venues employed new staff in good faith but, necessarily, after the furlough eligibility date, so delay means that those employees cannot be furloughed. Instead, they find themselves in new roles, often with an increasing chance of being laid off – it’s not the best introduction to a struggling sector and is doing little to boost confidence in our workforce.
“If we must wait until 19th July to lift restrictions, and noting the recently published data from the Events Research Group continuing to show the low risk posed by hospitality and events, the eligibility date must be retrospectively changed, accompanied by a targeted furlough with zero employer contribution for those businesses that remain forcibly shut or restricted. These measures would protect newer appointments and allow staff retention for when restrictions are finally lifted, rather than unfairly placing a further erosion on the cash-starved businesses trying to provide employment.”
