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Chancellor urged to prioritise hospitality ahead of potential July emergency budget

02 June 2020 by
Chancellor urged to prioritise hospitality ahead of potential July emergency budget

Chancellor Rishi Sunak has been asked to put hospitality at the heart of plans to reboot the economy amid reports an emergency budget statement is prepared for July.

With warnings the UK is on the edge of an unprecedented recession, the Treasury is expected to introduce measures to stimulate the economy and stem an increase in unemployment.

Sunak is reported to have highlighted the hospitality industry in a conference call with MPs, pressing the need for it to reopen. An insider told The Times that the chancellor said: "If we don't get hospitality open, two million jobs will go by this summer".

The industry has been clear about the measures it needs to preserve jobs and play its part in driving the country out of a recession. Kate Nicholls, chief executive of UKHospitality, said: "Over the last decade, hospitality has been the driver of economic growth. We've been growing year-on-year by 4% or 5% consistently and generating one in six of net new jobs.

"If hospitality is strong, it is a foreign export earner for tourism, but it also means you have jobs, growth and investment in local high streets. If you're going to talk about levelling up and creating jobs and opportunities across the country, hospitality is one of your vehicles to be able to do that.

"It's a welcome reaffirmation that the government recognises that this is a sector that's not in structural decline and that we just need to get back on track to deliver that."

Nicholls said that the sector would be looking for action from the government on several points. First, a clear date for reopening, along with guidelines for social distancing and a pledge to keep these requirements under review.

Action was also needed on rent and property debt, she said, alongside longer-term measures such as a VAT reduction and an extension of the business rates holiday.

A reduction in VAT for hospitality and tourism has been highlighted as a key means to support the industry as it reopens under distancing restrictions, with the government urged to follow the example of other European countries.

Jonathan Downey, founder of Hospitality Union and chief executive of London Union, said a similar move in the UK would "help stimulate economic activity for those businesses that survive this", as well as seeing lower prices for consumers and better margins for operators. Nathan Outlaw, founder of two-Michelin-starred Restaurant Nathan Outlaw and one-Michelin-starred Outlaw's Fish Kitchen, both in Cornwall, added that "any help will make a difference" as hospitality looks to reopen under operational constraints.

Picture: Shutterstock

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