Help Restaurants to Help the Economy, Hospitality Trade Boss Tells Chancellor

The boss of the restaurant industry’s principal trade body, UK Hospitality, has reacted to the Chancellor’s Comprehensive Spending Review today, saying that protecting jobs in the hospitality industry can “catalyse the U.K.’s economic recovery, and avoid predicted unemployment growth.”

Following chancellor Rishi Sunak’s statement to the House of Commons this lunchtime, in which he said an “economic emergency had only just begun,” UK Hospitality’s Kate Nicholls said restaurant industry “jobs are at the core of the grave unemployment forecasts the Chancellor announced today, yet the sector has shown repeatedly, most recently in August [during Eat Out to Help Out], how those jobs can help deliver economic growth for the economy.”

But, Nicholls added, hospitality can only boost the country’s economic prospects if it survives the “harsh” winter, and that meant getting the necessary support immediately. More, any benefits for workers would only be benefits if there were jobs to offer them. “The increase to the National Minimum Wage will be a great benefit to many workers in our sector only if the businesses that employ them are still around,” she said.

Nicholls is echoing what the treasury itself knows, as evidenced by the energy and expense that went into realising the Eat Out to Help Out this summer: That the hospitality sector “is key in preventing unemployment getting out of control,” she said. Before the pandemic, hospitality was the country’s third biggest employer; statistics released in the summer revealed that no other industry had been hit harder by the crisis, with over 600,000 jobs having already been lost in hospitality.

“The sector is being hit hardest by this crisis,” Nicholls said again today. “But it is also the sector which could lead the recovery of the economy if given the chance.” She said there was a key precedent: “As demonstrated after the financial crisis in 2008, we can provide jobs, investment and opportunities in every region of the U.K. and the economy back up to full speed.

“Once the crisis has passed, people will want to go out for a drink or a meal [...] Hospitality is central to all of this.”

Growth was contingent on getting the support now, as restrictions look poised to severely hamper the ability of restaurants and pubs to trade in the run up to Christmas — ordinarily a key time for those businesses. “We can only deliver the growth that the Treasury desperately needs if we survive the winter [...] That is not just a disaster in the short term, it undermines the efforts to recover next year and into 2022,” Nicholls observed.

Critically, and not for the first time, she said that financial support must be comprehensive and soon. “A swift announcement to fill the gap in hospitality previously filled by the Job Retention Bonus [scrapped after the reintroduction of furlough], coupled with a solution on rents, is critical for immediate survival,” she said.

Thereafter, the industry’s revival would be benefited by and extension to the VAT cut, currently down from 20 to five percent, and an extension of the business rates holiday to the end of next year. (That is set to expire at the end of the financial year, in March 2020l).

“Every venue that we can save now means jobs safe and secure as we look to rebuild,” Nicholls concluded.

As soon as restaurants learn under what restrictions they can reopen next week, they’ll be looking next at what the chancellor can offer them in order that they can make it into 2021.