Trade body UKHospitality has called on the Government for urgent support if thousands of hospitality businesses are to avoid collapse this winter in the face of soaring energy costs.
In a letter to Chancellor Nadhim Zahawi and Business Secretary Kwasi Kwarteng,
UKHospitality Chief Executive Kate Nicholls writes:
“Hospitality businesses are facing a crisis this winter, with soaring costs combined with a sharp drop in disposable incomes for our customers.
“Without support, the industry will see widespread business failure, leading to tens of thousands of job losses, persistent scarring to high streets and damaged social mobility.”
Employing more than 2.5m people, including some of the most sensitive to price increases, hospitality businesses must continue to trade so that staff can continue to pay their bills, but face enormous energy cost increases while having to light, air-condition, heat, chill and cook.”
Nicholls adds: “Support has rightly been committed to households, but more must be done to help businesses, particularly SMEs, that are at risk of failure due to no fault of their own. Hospitality businesses had their resilience severely strained during the pandemic and are not able to weather the worsening storm they now face. Immediate intervention in the commercial energy market is essential to avoid dire consequences.”
In her letter, Nicholls calls on the Chancellor and Business Secretary to introduce ‘a comprehensive package of measures to the end of March 2023’, including a business rates holiday for all hospitality premises, with no caps applied; deferral of all environmental levies; the reinstatement of a generous HMRC Time to Pay scheme; and the reintroduction of a trade credit insurance scheme for energy.
She also wants to see the April 2022 increase in the VAT rate for hospitality from 12.5% to 20% reversed, to help the economy to keep growing.
Nicholls writes: “This package of five measures will ensure the survival of businesses, the continuation of employment and the flow of wages, restraining inflation and leading to investment in our communities.
“Hospitality is critical to the nation’s recovery from Covid, but it needs support to get through this current crisis, and as quickly as possible.”