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Restaurant, pub and cafe chains employ tens of thousands of people across the UK
Hotel, cafe and dining chains will fail and jobs will go if the government does not do more to help the industry, a trade group has warned the chancellor.
In a letter to Rishi Sunak, lobby group UK Hospitality said coronavirus was an “existential threat” to the sector.
It wants to change laws to allow temporary staff redundancies.
UK Hospitality boss Kate Nicholls said, without help, “a significant number” of jobs could disappear by May.
In the letter, seen by the BBC, Ms Nicholls suggested broader support for the sector such as introducing measures “to permit temporary staff redundancies where demand falls substantially – with Universal Credit covering wage costs”.
Other government policies UK Hospitality would like to see include a business rates holiday for all businesses regardless of size, all payments to HMRC suspended for three months and Government Statutory Sick Pay payments to all hospitality businesses.
‘Jobs at risk’
Ms Nicholls told the BBC that even some of the largest hotel chains, pub chains and casual dining brands all “run the risk of not existing going forward”, such is the economic impact of the coronavirus pandemic.
“This is business-critical – these are cash businesses, put simply, if you don’t have people coming through the door, you will run out of cash very quickly.
“So we are talking about intervention that is needed next week to make sure that in six to eight weeks these businesses continue to trade, and if we don’t get that support, by May, we will be facing business failures and a significant number of jobs at risk.”
“This is affecting hospitality companies of all sizes and shapes…it’s high street businesses that are seeing footfall decline, so your pubs, bars, your cafes where you pop in for a sandwich, but also it’s the larger companies across the sector – they are the firms that employing the most people,” she added.
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Chancellor Rishi Sunak offered business rates relief for some small businesses in this week’s Budget
In Mr Sunak’s first Budget this week, business rates relief was granted to companies with a rateable value of less than £51,000, which he said could save a business up to £25,000.
The measure applies to firms including shops, cinemas, restaurants and hotels.
However, Ms Nicholl said that the because many of the biggest employers in the hospitality industry operate from the largest premises on the UK high street, they will not benefit from the new business rate support.
‘Three months left’
The financial impact of the coronavirus pandemic on the hospitality sector is being shouldered by businesses large and small, but one hotel manager said businesses of his size were ignored by the chancellor and are teetering on the brink.
Mark Cotman is the group operations director at York House hotel in Eastbourne, and said his bookings are down 60% and he expects them to get worse.
“We’ve got the money to carry on for maybe two or three months, and then we’re out of money. Then what do we do about paying staff, paying VAT, paying the veg man, the butcher?…We will run out of money, Mr Cotman said.
Mark Cotman says his hotel is usually full at weekends, but is now running at only 40% occupancy
“The larger businesses like ours have received no assistance in the budget.
“We’ve been offered a facility of maybe applying for loan but of course that’s got to be paid back. If we’re not taking any money, how can we pay the loan back?”
A Treasury spokesperson said: “On Wednesday, the chancellor announced, in total, a £30bn fiscal stimulus to support British people, jobs and businesses through this moment.
“Because of our extension of business rate relief, including to the hospitality and leisure sectors, around 900,000 properties, 45% of those in England, won’t pay any business rates in 20/21.
“HMRC will also help businesses and self-employed individuals experiencing temporary financial difficulties due to Covid-19.”