UKHospitality calls for government support and reform

Sara Kirsch Sara Kirsch Uploaded 08 June 2021

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UK: Kate Nicholls, UKHospitality CEO, encouraged the Treasury Committee to further support the struggling hospitality sector at a hearing this week.

At the committee hearing, Nicholls highlighted the need for government intervention, as hospitality businesses across the country are currently suffering from a year of unprofitability and will continue to struggle under current restrictions. Nicholls believes that if support is not granted to these companies soon, there is a risk of “economic long Covid”.

Nicholls believes the hospitality sector will be able to support the struggling economy and its recovery, as it did in the 2008 financial crisis. However, the industry will not be able to help without first being more fully supported by the government. 

Hospitality businesses are in severe debt, as the sector lost more than £87 billion in the last year. Nicholls asserted that current government support is insufficient to help the hospitality sector remain functional. She called upon the Treasury Committee to do more to aid these struggling businesses.

Nicholls said: “Current government support is not sufficient to cover the sustained hit on revenues that businesses in the sector have suffered following months of lockdown and more than a year of tough trading restrictions. Average hospitality monthly costs are between £10,000 and £20,000, while the average government support is £3,000 per month.”

Additionally, Nicholls urged the government to continue with their plans to lift all restrictions on June 21, as many hospitality businesses are unprofitable, and some have still been unable to reopen. She also encouraged the committee to work with newly reopened businesses to support them and find the best solutions to the problems they will face.

Nicholls said: “After re-opening in full, the industry must be given breathing space to gauge customer demand. To achieve this, the Government needs to work alongside the sector, landlords and shareholders to find a solution to the £2 billion plus in rent debt that hangs around the neck of the industry.”

In addition, out of worry that rent debt will inhibit the sector from recovering, Nicholls requested that the government extend the eviction moratorium. This worry comes from a UKH survey that showed one in five sector businesses said that rent debt will cause insolvencies.

She also advocated for landlords sharing the burden of rent debts with businesses by writing off 50% of rent debts for a closure period.

Nicholls called for further reforms in regard to the business rates system, which she believes is prejudice against hospitality businesses. She also advocated for a permanent reduction of the VAT.

Nicholls believes that the hospitality industry can help with “levelling up” the government agenda, but only if the government will cooperate in helping businesses recover first.

 

 

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