UKHospitality urges Treasury action amid 'economic long Covid' fears

Giving evidence to the House of Commons Treasury Committee hearing yesterday (7 June), UKHospitality chief executive Kate Nicholls highlighted the need for further Government support for the sector, which remains unable to trade profitably under current restrictions.

She highlighted that thousands of hospitality businesses are all in jeopardy due to months of enforced closure, more than a year of strict trading conditions and ongoing uncertainty.

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.”

During her evidence, Nicholls also reiterated the importance of the Government sticking to its roadmap and lifting all restrictions on 21 June, as currently only two in five hospitality businesses are operating profitably and many, such as nightclubs, are yet to reopen.

In a UKHospitality survey, a fifth of sector businesses said that rent debt will lead to insolvencies, and that rent debt will cast a long shadow over the sector, impacting its ability to rebound quickly.

Nicholls called for an extension of the eviction moratorium and for landlords to equally share the pain with businesses in the sector by writing off 50% of rent debt for closure periods.

She also said urgent reform of the business rates system and a permanent reduction to VAT are also needed if the sector is to be able to recover to its fullest extent.

“After reopening in full, the industry must be given breathing space to gauge customer demand," she added.

"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.”