With the enforcement of “curfews” and reintroduction of specific restrictions such as local lock-downs likely to be more prevalent in the coming weeks, the challenges the industry face are not going away anytime soon. In some ways, the sector still has hurdles to overcome that are just as big as they were back in March. But, as we did earlier this year, hospitality will continue to show its ingenuity, collegiate spirit and strength to persevere and overcome.
Working together with a unified voice has been an integral part of our ability to tackle the challenges of this pandemic and success in lobbying government effectively, and it will be equally important over the coming months as we round off this most turbulent year. Our campaigning and asks of government will be concentrated on pushing for targeted employment support to protect jobs as furlough tapers down; the continuation of hospitality-specific policy measures such as the VAT cut and business rates holiday and for a roadmap so the “forgotten” parts of the sector can reopen.
We’ll also continue to extol the tremendous work by the sector to ensure the safety of guests and amplify the timely words this week from Dr Justin Varney, director of public health at Birmingham City Council that, with safety measures in place, there is no safer place to socialise than in hospitality venues.
On the issue of curfews, I know from my conversations that operators are working extremely hard and taking every precaution to keep everyone safe, ensure social distancing is maintained and deliver effective test-and-trace data capture, every day. Our sector is very willingly taking these important steps to help tackle covid-19, and is doing so at great expense. It’s difficult to see how an arbitrary cut-off helps; what is more certain is the very serious harm and damage it will do to businesses and the impact on jobs. Nonetheless, it is vital that all businesses do all they can to comply with government rules to stave off further restrictions on trade.
We are experts in keeping guests safe, and with stringent measures in place, hospitality should be allowed to return to full force. It’s also why – when the science says it is safe to do so – social distancing measures that are restricting both capacity and revenue should, when the time is right, be reviewed and refined to enable the sector to return to sustainable profitability. This is the argument we are putting to government, particularly on the urgent need to provide a roadmap to reopening for parts of the sector, like nightclubs, that remain closed. Until we are allowed to reopen fully, further targeted support is required. A third of hospitality workers are still on furlough, equating to almost one million people. As I told the House of Lords Employment Committee this week, a huge number of jobs remain at risk and we must protect as many of those as possible, as far as we are able to.
Of course, we have already lost a significant number of jobs and, for the sector to play a meaningful role in the economic recovery, we need to get back to a position where we are able to create jobs, as we did in the decade following the global financial crisis. As we saw with the potency of the Eat Out To Help Out scheme, stimulating consumer demand and maintaining confidence is crucial for this. The restrictions put in place by the “rule of six” and local “curfews” have damaged the feel-good factor achieved through the scheme and risk further harm as we approach a key trading period. Our message to ministers is “let’s not cancel Christmas just yet”.
Looking further down the line to the start of 2021, an extension of the VAT cut is integral to recovery. The prospect of a hike in January, already a difficult month for the sector, would shatter consumer confidence and restrict the potential for a sustained path back to health. An announcement in the Autumn Budget to extend the cut would help the business plan ahead for 2021, protect more jobs, and bolster the prospects of domestic tourism for the coming year. We will be pressing the case for this with more to come soon.
The extension of the business rates holiday is equally important; the prospect of this ending next April along with a rise in VAT would put many businesses in an extremely perilous position. With the social distancing restrictions that are currently in place, the return of business rates would cut deeper into operating margins. It would also hit those hospitality businesses in city centres hardest, which are already under extreme duress due to rent costs and low footfall.
Targeted support in these areas, to reinforce this week’s welcome announcement of the extension of the eviction moratorium, would allow us to move through the next six months with a fighting chance. It’s still incredibly tough out there but with hospitality coming together and speaking with one voice, we can get back off the ropes.
Kate Nicholls is chief executive of UKHospitality
UKHospitality is a Propel BeatTheVirus campaign member