Furlough and VAT announcements welcomed, but more support and clarity is needed from Westminster and Holyrood
Calls for English Restart grants to be replicated in Scotland
TRADE groups and operators have given a cautious welcome to the various measures announced by chancellor Rishi Sunak in today’s Budget – but have called for more support and greater clarity from both the UK and Scottish Governments as the trade prepares for reopening.
Sunak announced a number of measures today (link), including an extension of the Coronavirus Job Retention (furlough) scheme and the lower VAT rate for hospitality businesses until the end of the September. A new UK-wide business loan scheme, a freeze on alcohol duty and cash grants for hospitality businesses in England were also unveiled.
While welcoming the “stability and peace of mind” that the furlough extension will provide employees, UK Hospitality chief executive, Kate Nicholls, said there is “still a worry that it will place unnecessary pressure on fragile businesses just as they are beginning to get back to their feet”.
She also called for the UK Government to make the 5% VAT rate for hospitality businesses permanent.
“It would be a positive legacy of an otherwise dreadful year for our sector,” said Nicholls.
“A permanent reduced rate of VAT for hospitality would redress the unfair tax imbalance that our businesses have faced for too long and make us internationally competitive.”
This was echoed by Marc Crothall, chief executive of the Scottish Tourism Alliance, who said: “The industry had hoped that the 5% rate would have been extended well into 2022 to allow businesses more time to recover and have the breathing space needed to meet the substantial costs of loan repayments and other significant costs which are looming on the horizon; we will continue to make the case for VAT not returning to 20% beyond March next year to stay competitive as a destination.”
He added that “continued, tapered support” for the industry will be necessary as the sector reopens in the coming months.
Emma McClarkin, chief executive of the British Beer & Pub Association, said today’s Budget will be good for pubs and brewers “in the short-term”.
“However, this is just the start of the journey on the hard road to long-term recovery for our sector,” said McClarkin.
“The chancellor has made it clear today he recognises the vital role local pubs play in their communities. Now he must continue that commitment by ensuring Britain’s pubs and breweries are supported in the long term. This should start by extending the VAT cut on hospitality to all drinks until at least the end of the year.”
Scottish operators called for greater clarity from the Scottish Government in the wake of the UK Budget.
Stephen Gow, general manager of the Chester Hotel in Aberdeen, called on the Scottish Government to confirm that it will match the ‘Restart’ grants announced for England – which are worth up to £18,000.
“It’s good to see the chancellor acknowledging that the hospitality sector has been badly hit and will reopen with more restrictions and we await details on the new Restart grants for English hospitality businesses, which the chancellor has said will be up to £18,000,” said Gow.
“Scottish businesses need this to be echoed in Scotland.”
And David Littlewood, chef owner of The Tor Na Coille in Banchory and The Kildrummy Inn by Alford, said operators need more details from the Scottish Government on how they will be allowed to trade in the coming months.
“We should also remember that we still have no idea what reopening will look like,” said Littlewood.
“Whether there will be new restrictions, new regulations, different opening hours, with alcohol, without alcohol.
“’Pivoting’ a business is exhausting and we need to know now how and when we can open so we can fully appreciate the chancellor’s measures announced today.”
