UKH calls on Government for support package in Budget submission to Treasury

04-Oct-2021 - Last updated on 06-Oct-2021 at 08:31 GMT

Government prompted: the hospitality sector's vital role in the British economy (image: getty/Nastasic)

The industry body UKHospitality (UKH) has proposed a support package aimed at boosting growth in the hospitality industry, in its Budget submission to the Treasury last Thursday.

The package aims to combat the punitive business rates, rent demands and increased VAT the sector is facing after 18 months of closure and harsh trading restrictions.

Measures

UKH is asking for measures including:

Reform to the business rates system, including a lower rate for hospitality.
A permanent 12.5% VAT rate for hospitality and tourism.
A code of practice mandating a sharing of the pain of rent arrears between landlords and closed sectors, including a 50% rent debt write-off for tenants for all closed periods.
An increase to primary threshold for employer National Insurance Contributions to £12,000.
A lower level of excise duty for all categories of alcohol sold in licensed venues.

UKH CEO Kate Nicholls said: “Of all the measures the Government could take to help the hospitality sector secure a more rapid recovery and rebuild resilience faster, the most effective would be to address the unfair business rates system, which requires the sector to overpay by 300% relative to its turnover; the £2.5 billion in rent debt accrued during the pandemic that currently weighs on the sector’s shoulders; and to retain the 12.5% VAT rate for hospitality and tourism to ensure the UK remains competitive in a global tourism market, along with providing consumers with continued affordable prices and creating 125,000 new jobs.”

The industry body has also proposed for the Comprehensive Spending Review to boost Government spending on tourism attraction, skills and apprenticeship funding, the Kickstart scheme and High Street regeneration funds.

Economic activity

Hospitality represents 10% of UK employment, 6% of business and 5% of GDP. The sector creates £130bn in economic activity and generates £38bn of tax for the Exchequer.

The hospitality industry is the third largest private sector employer in the UK, and is bigger than the automotive, pharmaceuticals and aerospace sectors combined.

The body speaks on behalf of 730 companies, including leisure and ‘out-of-home’ businesses, such as FTSE 100, as well as 6,000 affiliated operators.

Nicholls said: “The hospitality sector has proved before that it can lead the way out of an economic crisis and since our businesses were permitted to reopen in April 2021, we have seen strong employment growth. Given the right conditions we can contribute to create jobs, rejuvenate high streets, generate billions in tax and contribute to growth.”