Hospitality welcomes VAT cut and jobs package

Tourism and hospitality chiefs and associations have reacted very positively to what turned out to be a key theme of Chancellor Rishi Sunak’s Summer Statement aimed at relaunching the economy as the COVID-19 threat recedes.

Measures included reducing VAT from 20% to 5% on hospitality services including accommodation and food until next year, meal discounts Monday to Wednesday throughout August and cash incentives for businesses taking back furloughed staff.

The UK Housekeepers Association @UKHofficial tweeted: ‘This is excellent news and shows Government is listening to the needs of hospitality and how with the right support we can play out part to support economic growth and national wellbeing and help the UK recover.’

UKHospitality chief executive Kate Nicholls said: “It is reassuring that the Chancellor singled out hospitality and tourism as a vital part of the UKs economy and a pillar of social life around the UK. It is also good to see that Government acknowledges that our sector has been uniquely hit by this pandemic.

“Customer confidence is key to our sector’s revival and our ability to help Britain’s economic recovery. Applying every precaution to provide safe venues will count for nothing if customers are not coming through our doors. This significant VAT cut, heightened ability to retain staff and incentives for consumers to eat out together amount to a huge bonus. We hope that the UK public rightly sees it as sign that we are ready to welcome them back safely. The future of many businesses and jobs depends on it.”

Nicholls also welcomes schemes to encourage businesses to keep staff on the books. She said: “Support to retain our workforce with a retention bonus, kickstart employment and bring on trainees and apprenticeships should also be a huge boost to our sector as we begin our long recovery. Businesses have been closed for months and, with the possibility of a difficult winter ahead, support to create jobs will be vital if hospitality is to play the significant role we hope it will in helping boost the economy.”

She warned that this didn’t mean ‘we are out of the woods’ and that there were still significant challenges ahead, including the spectre of rent liabilities which many businesses are still facing from their closure period. British Tourist Authority chairman Sir Patrick McLoughlin CH said: “The package of measures including a major cut to VAT will help the industry as it starts to rebuild and to compete for international visitors while encouraging domestic visitors to get out and enjoy the summer. The key for success will be ensuring that we continue to attract domestic and international visitors through the autumn and extend the season.”