Hospitality sector calls for clarity on six-month support plan

Reacting to Prime Minister Liz Truss’s announcement today (8 September) of a six-month support package​​, trade bodies called for urgent details on what businesses can expect in the coming months.

Emma McClarkin, chief executive at the British Beer and Pub Association (BBPA), welcomed the Government’s intervention but says that more detail is needed on the measures.

“By committing to an energy price cap for businesses today the PM has shown she understands just how critical the energy crisis has become for our breweries and pubs, and just how important pubs and brewers are to their communities. Whilst we still need detail on the level of the cap, this intervention will hopefully help thousands of business owners to breathe a little easier over energy bills in the coming winter months,” she says.

“This announcement will avert the immediate threat of the energy crisis for businesses, but we need clarity and assurance for the long-term so our brewers and pubs can plan effectively and thrive at their heart of their communities long into the future.”

In her announcement, Truss outlined the Government’s plans to help businesses with the energy crisis, saying that they would receive "equivalent" support to that promised to UK households, where average household energy bills will be capped at £2,500 a year from the start of next month.

The support offers businesses an equivalent guarantee for six months, with the Government also working with businesses to review where further support can be targeted.

UKHospitality has welcomed the Government support but is also calling for more detail.

“We very much welcome the Prime Minister’s recognition of the specific struggles the hospitality industry faces and the promise of further support, alongside her positive plan to help consumers and businesses tackle rising energy bills,” says Kate Nicholls, CEO of UKHospitality in a press statement.

Writing on Twitter, Nicholls said: “But businesses cannot wait for three months to find out what support is planned nor can they wait until the end of the price freeze to receive it,” she adds.

“Without urgent details [on] who and how it will be targeted, many hospitality biz will be forced to take difficult decisions.”

A more critical response

In a more critical response, Michael Kill, CEO of the Night Time Industries Association says that the sector couldn’t afford to be given ‘drip fed support’.

“We are extremely disappointed at the announcement by the Prime Minister today, this half measure package is tantamount to the delivery of support experienced during the pandemic, but lacks considerable detail to alleviate current business concerns,” he says.

“As the first major announcement of the Prime Minister and Chancellor's tenure, the Government has failed businesses today, and with mounting debt across the sector we will see many have no choice but to consider the future, placing thousands of jobs at risk in the coming weeks.”

“We have no time for drip fed support, or to await the impact assessment of incremental measures, this needs to be a concise and immediately accessible package, which is proportionate and scalable."

Matthew Sims, founder of the #BusinessSOS campaign​​ that is calling on the Government to introduce measures to help the hospitality sector, has also called for action, saying that there is no time for a Government review.

“The nation was expecting an announcement today on how businesses would be supported, and its notable absence is a harrowing moment for our high streets. The clock is already ticking, and businesses simply do not have the time to wait for a review,” he says.

“Businesses need action, and they need it now. Over 150,000 businesses have been holding out making difficult decisions on the promise that support for businesses affected by the energy crisis would be coming today. This hasn’t happened, and swathes of businesses from now will be left with no option but to close, triggering mass unemployment, which will only exacerbate the overall cost of living and energy crisis we are experiencing.”

Further support needed

Trade bodies also remain hopeful that the Government will introduce new measures in the coming week to further support the hospitality sector.

The Chancellor is due to make a fiscal statement next week where many in hospitality hope that he will announce a reduction in VAT for hospitality businesses.

“We look forward to working with the new Government on developing plans that will support long-term recovery for our sector but in order to give businesses big and small a chance to make it to the spring we will need support this autumn and winter,” says Nicholls.

“Measures need to provide a swift cash injection, such as cutting VAT for the sector to 10% and providing business rate relief.”

BBPA’s McClarkin has echoed this view. “Now we need to hear more on business rates, VAT and keeping beer duty low,” she says.