All-party parliamentary group calls for VAT cut and rates support for hospitality

A report by the All-Party Parliamentary Group for Hospitality and Tourism has called for cutting tourism VAT, an overhaul of the business rates system and the creation of an October bank holiday.

The report, published by UKHospitality, follows an inquiry by the APPG, chaired by MP Steve Double, which collected testimony and written evidence from more than 350 businesses, trade bodies and student unions.

The report states:

• Hospitality and tourism sectors have been two of the hardest-hit by Covid-19. Just 11% of hospitality businesses have been able to operate normally during the lockdown and international tourist arrivals are likely to be down 30% for the year.
• When these sectors reopen, most businesses will be operating sub-economically. A common framework will be required to ensure that venues can operate safely, as well as a phased approach to reopening, due to the variety of business models across the sectors. A false start would be devastating for both hospitality and tourism.
• Government financial support of both sectors has been crucial in keeping businesses alive and jobs secure, however, some businesses have struggled to access it. This support must be extended to keep jobs safe.
• Urgent action is required on rents and the government must undertake a holistic review of business costs.
• The government should work with sector businesses to reconsider the two-metre social distancing rules.
• Promoting tourism should be a priority and the government should create an October bank holiday and cut tourism VAT by 10% to encourage domestic tourism. The introduction of air bridges and cutting air passenger duty would also boost inbound tourism.

Double said: “The UK’s hospitality and tourism sectors have been devastated by the Covid-19 crisis and this report highlights the scale of the damage done to businesses. These are two of the most important parts of our economy and our inquiry has highlighted the importance of supporting these vital sectors in both the immediate and long term.

“While the support provided to the sector so far has been very welcomed, we are under no illusions that the path to recovery will be tough. This report and its recommendations provide the government with a blueprint for supporting businesses. There is every reason to believe that businesses can bounce back if they have the correct support from Westminster and devolved governments.”

UKHospitality chief executive Kate Nicholls added: “In every region of the UK, high streets in town and city centres have been almost entirely shuttered and normal life has been suspended. Hospitality and tourism were some of the first sectors to take a noticeable hit, even before lockdown began. The reality is that these sectors will also be two of the last to fully emerge and it will take time for employers to get back up to anywhere near full speed.

“If the government is positive and decisive in delivering support for these sectors, then the job will be made much easier. Businesses will be saved and jobs all around the country kept secure. We hope that the government acts on the recommendations in this report. Otherwise, the road back will be a long and hard one.”

Urgent government inquiry to examine how sector can be supported to reopen >>