Chancellor Rishi Sunak has announced that the 12-month business rates holiday announced for smaller businesses in last week’s budget will be extended to all hospitality businesses, irrespective of their rateable value.
He also announced that government-backed loans worth up to £330b will be available to businesses as part of an “unprecedented” set of measures to protect the UK economy from the coronavirus crisis.
This includes extending the new business interruption loan scheme for SMEs from £1.2m up to £5m, with no interest due for the first six months, from next week. Larger businesses will be supported through a new lending facility agreed with the Bank of England.
For businesses whose insurance policies cover pandemics, Sunak assured they would be able to make claims based on the government’s action yesterday to advise the public to avoid pubs and restaurants, while smaller hospitality businesses which don't have insurance will be provided with cash grants of £25,000.
Sunak described the coronavirus crisis as “a public health emergency but also an economic emergency” and the announcement as “only the first steps” with further measures expected to be announced in the coming days.
Responding to the measures, UKHospitality chief executive Kate Nicholls said: "Rishi Sunak really delivering here for hundreds of thousands of businesses who were last night in despair at having their business closed by the PM announcement. This is a huge breathing space to allow businesses to focus on their teams and the promise of more to come if needed."
Serena von der Heyde, owner of Georgian House hotel in London's Pimlico and Victorian House hotel in Grasmere, Cumbria, described the announcements as "a massive relief".
She said: "It seems to me that they have grasped what our issues and major costs are within the industry and are addressing them - quickly. The scrapping of the rates for all hospitality businesses is absolutely vital and I welcome this, particularly for our London business. Similarly, the employment packages they have spoken about could be really positive in being able to support our teams which is absolutely brilliant. The government has also recognised that by advising the public against using hospitality venues, they have effectively closed us down. Now that the government has explicitly said this, we will be covered by insurance which will be a massive relief to many businesses within the industry.
"The insurance industry now needs to ensure that they support us accordingly. If the government follow through on everything they have spoken about today, then we are going to be in a much better position than I thought we were going to be in yesterday."
However, Campaign for Real Ale (CAMRA) national chairman, Nik Antona, said the measures did not go far enough.
He said: "While a business rate holiday for all hospitality businesses and rate relief for eligible pubs will help alleviate some costs, this will do little to compensate for the potential collapse of cashflow in businesses which customers have been told to stay away from. Making loans to businesses with no money coming in and multiple overheads to meet through a period of no, or low trading, is simply kicking the can down the road.
"We would urge additional measures to cover all liabilities, however long the restrictions on pubs, to ensure these vital businesses can emerge unsaddled by debt and able to deliver the many benefits to the communities they serve."