Energy price guarantee 'not enough' to safeguard sector

Leaders of trade bodies representing restaurants, hotels, pubs, brewers, bars and consumers have written to the chancellor following the mini-budget last week, highlighting the urgent need for further support to safeguard hospitality businesses.

In the letter to Kwasi Kwarteng, representatives from across the hospitality industry thanked the chancellor for his support following the business energy price guarantee, as well as his recognition that energy was not the only challenge to growth. They also recognised the positive approach he plans to take to reduce the burden of excessive business regulations and welcomed the freeze to alcohol duties.

They warned, however, that these measures are simply not enough to safeguard the future of the sector. The combination of pandemic specific debts, minimal cash reserves, ongoing staffing issues and escalating inflationary costs across all areas of the idustry, all against a backdrop of the cost of living crisis, is devastating businesses. Small hospitality operators in particular face the biggest threat to their survival.

In the letter, the trade associations called on the chancellor to recognise the vulnerability of the sector by providing urgent support in two key areas:

• An immediate reduction in the headline rate of VAT for hospitality on all food and drink sales
• Cancellation of business rates for the remainder of this financial year

In the joint statement, the industry leaders write:

"Whilst the announcements made in the mini-budget will go some way to supporting our sector, the stark reality for many businesses is that they will still be facing energy costs of at least double those of 2021. At a time where crippling inflationary pressures across all areas of their businesses are already threatening their survival, this is not sustainable. Targeted support for hospitality businesses at the heart of their communities in villages, towns, cities and high streets across the UK will now be critical to ensure they can play a key role in the government’s growth and levelling up agenda.

"We need a plan for wide-ranging support that is in place for more than six months, allowing these businesses time to plan for their futures. The current uncertainty facing hospitality businesses is a huge barrier to growth and the immediate support we are calling for will give many the breathing space they need to ensure their survival past this winter."

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