16th Dec 2021 14:02
(Alliance News) - Hospitality firms in the UK on Thursday were ramping up calls for support from the government as the spread of Omicron and health warnings wreak havoc on hard-hit pubs and restaurants.
UKHospitality boss Kate Nicholls has made a plea for business rates relief and VAT discounts to be extended, warning that the sector has been knocked harder than expected by the new restrictions.
She said hospitality sales have already plunged by more than a third over the last 10 days with GBP2 billion of trade already lost in December.
It comes as the CBI also urged the government to provide support "in lockstep with future restrictions".
The rapid rise in Covid-19 cases as the Omicron variant sweeps the country has led to a surge in booking cancellations.
Consumer confidence has been knocked by new restrictions and increasing health warnings.
England's chief medical officer, Chris Whitty, has advised Britons to consider cutting back socialising around Christmas, while UK Prime Minister Boris Johnson said people should "think carefully" before going out to celebrate.
Nicholls said: "It is quite clear that the impact of the current guidance and restrictions has been more hard hitting on an already beleaguered hospitality sector than expected."
She added: "It is imperative that local authorities release the discretionary grants and rate relief they have to affected businesses immediately and VAT and rate relief support is extended and not turned off prematurely."
The boss of pub group Young & Co's Brewery PLC has called for Chancellor Rishi Sunak to "show up" and re-introduce a lower rate of VAT and business rates holidays.
Patrick Dardis, chief executive of the 220-strong chain of pubs, told the PA news agency: "I have no idea where Rishi Sunak is right now but he needs to show up and give the industry his backing.
"There are thousands of businesses – not just pubs – that could collapse in January if the current situation isn't partnered with proper financial support.
"We have given up on this being the fantastic Christmas we had hoped, but will obviously continue to do our all for all the customers still with bookings.
"We have seen similar to everyone else. We saw 30%-plus cancellations last week and that's looking higher this week and next week.
"The industry have spoken with [the Department for Business] in recent days but what we have heard has not been very encouraging to be honest, so hopefully things will change soon."
Firms across the sector are asking for an extension of the discounted 12.5% VAT, which is due to revert back to the original 20% rate in March next year, with UKHospitality also pushing for a deferral of business rates.
She said the group was working with the Treasury and across government to help ensure support is maintained for the sector.
Earlier this week, the International Monetary Fund said Chancellor Sunak should be "ready to deploy" a mini form of furlough support in the event of widespread closures to help sectors suffering the most, such as hospitality.
Rain Newton-Smith, CBI chief economist, added: "Further support for struggling firms will be needed if fresh government public health measures prevent firms trading their way to recovery.
"Cash is king, so helping affected firms with cashflow, by ensuring unspent local authority grants are distributed to firms, giving firms more headroom to manage their coronavirus debt repayments and considering measures to reduce the fixed costs of businesses where demand is severely affected should be on the table."
Michelin-starred chef Tom Kerridge has highlighted the suffering in the sector when he revealed one of his restaurants has seen more than 650 cancellations in the past six days due to Omicron fears.
The chief executive of pub and brewery Shepherd Neame Ltd said his business had been thrown into a "zombie world" by current concerns and government messaging.
Jonathan Neame told Times Radio: "We've seen a significant number of cancellations and that's accelerating every day, and will accelerate even further after the news last night, which seems to have thrown us back into that sort of zombie world of the first week of March, of the pandemic last year."
Dominic Paul, chief executive of takeaway chain Domino's Pizza Group PLC, said parts of the hospitality industry "are going to have a really tough few months".
He added: "The government showed a real willingness to support the industry before and I think they probably will again."
By Holly Williams, PA Deputy City Editor
source: PA
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