A report from the Federation of Small Businesses (FSB) has called on the government to develop a hospitality and tourism strategy to focus on underrepresented small businesses.
The report, ‘A Menu for Recovery', has asked the government to help small firms in the sector employ and retain skilled staff, which many businesses are struggling to do against a backdrop of Brexit and the pandemic.
It said cutting employers' National Insurance contributions would play an important role in enabling retention and recruitment. It also wants to see more young people encouraged into the sector by extending incentive payments for employers in England to deliver industry placements under T Levels beyond July 2022.
The group has also called for urgent action to:
- Extend the hospitality VAT rate reduction to 5% until March 2022 and 100% business rates relief throughout the full financial year for businesses in England. More than half (56%) of small hospitality businesses said further rates relief would support their high street.
- Make the process easier for businesses to apply to their local authority for a pavement licence and maintain the right for pubs, cafes and restaurants to operate as takeaways. FSB research found 65% of small hospitality and tourism businesses backed the relaxation of planning regulations.
- Reduce alcohol duty on beers, ciders and wines.
Levels of debt among businesses is rocketing, with 77% of small firms in the sector taking on debt post-Covid. The FSB said more support is needed to ensure they are able to manage it, as well as providing greater clarity around the Pay As You Grow scheme, ensuring all options covered by the scheme are available to all businesses with Bounce Back Loan debt.
Mike Cherry, FSB national chair, said: "The ever-rising cost of doing business was already weighing heavy on these firms and the pandemic has only exacerbated it. This week's decision to postpone relaxation will have dashed the hopes of thousands of small businesses that have been unable to operate at full capacity since the pandemic started. With a crucial summer season ahead, we need to make sure the beleaguered sector gets urgent help to ensure its survival.
"Our new report sets out some of the ways that government at all levels can help futureproof our brilliant hospitality and tourism businesses in the long term. Despite being a vital sector for the economy, tourism and hospitality businesses do not get the attention they deserve, and a new strategy tackling the huge number of challenges facing the sector would go some way to help."