Chancellor MUST act to rescue leisure industry from brink of oblivion, urges boss of UKHospitality
With his Autumn Statement just days away, Kate Nicholls has a message for Chancellor Jeremy Hunt. As the voice of the hospitality industry, which employs 3.5 million people and pays £54 billion a year in tax, she is demanding urgent action on business rates.
Otherwise, she says, a wave of small companies will be forced to close next spring because they will not be able to pay their spiralling bills.
The pandemic was followed by soaring energy bills, runaway inflation, a continued trend to work from home and rail strikes, which hit travel and socialising.
She fears that if Hunt doesn’t act now pubs, hotels and restaurants – which are still recovering from the impact of the pandemic – face another ‘cliff edge’.
Small businesses in the sector currently pay just 25 per cent of the hated levy. But in April, all business rates relief for the hospitality sector is due to end and in addition bills across the sector will leap by September’s rate of inflation – 6.7 per cent.
‘If the Chancellor does nothing that’s an extra £1 billion bill for the industry,’ she says. ‘Firms will trade through Christmas and then hand the keys back in January.’
Nicholls, 51, admits the Chancellor is in a bind. ‘It’s probably one of those times where you are lobbying more in hope than expectation. Like everybody else who is putting pressure on the Government, we are acutely aware of the tight set of circumstances we are facing with the public finances.
‘The logic of your arguments – no matter how compelling they are – runs up against that hard head of the Treasury about how much money is available.’ She is even less hopeful that VAT will be cut. During Covid, it was slashed from 20 per cent to as low as 5 per cent for the sector – a move that ‘saved many thousands of businesses’, she says.