Ahead of the prime minster’s press conference this afternoon, at which the chancellor is expected to announce a series of new economic proposals to help support businesses most affected by the government’s recent measures aimed at arresting the spread the novel coronavirus (COVID-19) outbreak in London.
In a letter to the prime minister Boris Johnson, UK Hospitality, with signatures from 200 CEOs from across the hospitality sector in Britain, have called on the government to provide immediate support for businesses. The letter makes clear that unless financial support is swift, then “the sector is looking at unprecedented levels of closures and job losses across the nation.”
The main points included are as follows:
- Extension of the business rates and NIC [tax on staff wages or PAYE] payment break to all hospitality businesses for at least six months. Last week’s budget did include a £12 billion emergency package for businesses affected by the novel coronavirus outbreak; however a relief on business rates affected only those whose properties had a rateable value of under £51,000, which disqualified the vast majority in central London. No provision was offered regarding tax relief on PAYE.
- The U.K to follow the lead of other countries such as the USA, France and Denmark by committing to additional working capital support while funding salaries and retaining staff. By way of comparison, France has guaranteed/underwritten €305 billion (£278 billion) of bank loans; and Denmark has provided an extra 200 billion Danish kroner (£25 billion) available for banks to lend to companies. President Trump is pressing for a new funding package from Congress to the value of $850 billion.
This is an extension of the suggestion from the likes of former chancellor George Osborne who called on the government to launch a new scheme worth hundreds of billions of pounds, to underwrite bank loans to businesses in order to “help them and their employees through this crisis.”
- Pressure on landlords and banks to avoid forfeiture of rent payments. UK Hospitality is also seeking relief from landlords and seeking to use additional government support in the form of emergency cash reserves so that businesses do not default on their payments.
Summing up the industry’s call and the crisis faced by the hospitality sector, UK Hospitality chief executive Kate Nicholls said: “This is by far the greatest crisis we have had to face as a sector. Venues are already closing and people are already losing their jobs.
“Unless we get immediate financial support from the Government, the country’s hospitality sector will cease to exist in any recognisable capacity.”