UKH reacts to Budget Statement

UKHospitality Chief Executive, Kate Nicholls, has reacted to the details of the Budget Statement.

Coronavirus emergency measures
• Business rates suspended for one year for small businesses in hospitality
• Business interruption loan scheme of up to £1.2m to support SMEs
• 14 days statutory sick pay refunded for businesses with fewer than 250 employees - 14 days statutory sick pay covered
• Abolition of business rates for one year for small businesses (rateable value under £51k)
• £3k benefit to all businesses eligible for SBRR or rural rates relief

“Hospitality businesses are on the front line of coronavirus impacts and need support as footfall and bookings drop and people self-isolate, and as serious cashflow problems arise.

“While easing business rates burdens and partial refunding of statutory sick pay will help support some businesses but while the measures announced today may give smaller hospitality businesses some breathing room, it’s vital to recognise larger operators, and the huge number they support, but which have today been utterly ignored at a time of business crisis.

“The perverse nature of the current system is underlined by the ongoing coronavirus situation, with punishing payments still expected of companies whose venues may not be able to open or operate.”

Business rates
• Business rates system review to be completed by Autumn Budget
• Pubs discount raised to £5k

Nicholls commented, “We finally have a much-welcome deadline for a review of the archaic business rates system. While the outcome of that remains to be seen, it’s a positive step that the Government acknowledges that the system requires modernising and improving.

“We also recognise that measures announced today, to further relieve pubs and to bring other hospitality venues into scope for reliefs are a positive recognition of hospitality and the vital role it plays in the UK’s economy and culture.

'That said, many of the hardest hit businesses will not benefit, either because they have rateable values above £51k (or above £100k for pubs) or because state aid rules mean that venues in bigger chains - the larger employers - will be ineligible, so more will likely be needed between now and implementation of a new system”.

Alcohol Duty
Alcohol duties frozen
“We warmly welcome the freeze on beer duty, for which we campaigned, and freezes to other alcohol duties. We look forward to engaging with Government on their call for evidence to review post-Brexit alcohol taxation, with the purpose of helping hospitality businesses.”

Wages and NICs
• NMW/NLW remit for Low Pay Commission
• Increase in employee contribution threshold to £9,500

Nicholls said, “We further welcome the remit issued to the Low Pay Commission as part of the Budget. It tasks the LPC “if the economic evidence warrants it” to “recommend that the Government reviews its target or timeframe” for implementation for NLW/NMW rises. We have long been calling for such autonomy and hope that the LPC implements it appropriately.

“An increase in the NIC threshold should help put money back in the pockets of consumers without increasing costs for businesses, which is to be applauded. It is disappointing, though, that there has not been a similar increase for employers which would have helped boost business investment and jobs, especially given the rises in wages costs.”

£1.5bn of new capital, over five years, for Further Education colleges
Nicholls noted, “The additional expenditure on FE colleges is a truly positive announcement. Such education establishments are a vital pipeline into hospitality careers and require the sorts of capital investment of which the Chancellor spoke.

'Along with a promotion of our industry’s careers, including via the sector deal, we hope that hospitality – and those entering our great industry - can benefit.”