Hospitality chiefs plead for financial support as Chancellor holds crisis talks

Rishi Sunak is meeting industry leaders after returning from California.

Hospitality bosses are putting Chancellor Rishi Sunak under pressure to hand out financial support after he returned from California for crisis talks with industry leaders (Peter Byrne/PA) (PA Wire)

Hospitality bosses are putting the Chancellor under pressure to hand out financial support after he returned from California for crisis talks.

Rishi Sunak is meeting industry leaders after facing criticism over his trip to the US while the spread of the Omicron variant of coronavirus across the UK began to have a damaging impact on the economy.

It is understood that he will hold talks with pub and restaurant bosses in person on Friday afternoon.

On Thursday night, Mr Sunak spoke to businesses, understood to include Greene King, Adnams Brewery and Nando’s, during a call from the US.

Sources told the PA news agency that those on the call urged him to freeze business rates, reduce VAT rates for the sector, and provide targeted support for the most heavily affected parts of the industry.

The Treasury launched a business rates holiday for hospitality, retail and leisure firms during the pandemic but this has been heavily reduced in recent months.

Meanwhile, hospitality VAT has increased to 12.5% from 5% in recent months and is due to return to 20% in April.

The weeks before Christmas are typically the busiest period for pub and restaurant operators but soaring rates of Covid-19 driven by the spread of the Omicron variant have caused a wave of cancellations.

Prime Minister Boris Johnson has insisted that the Plan B measures he has imposed in England are “sensible” and “proportionate” while the booster jab campaign proceeds.

But in Wales, tougher rules will be imposed after Christmas, with nightclubs ordered to close from December 27 and a return to the two-metre social distancing rule in offices.

In Scotland, First Minister Nicola Sturgeon has also warned that “restrictions on the operation of higher-risk settings, while of course undesirable, may now be unavoidable”.

Earlier this week, she announced a £100 million fund for hospitality businesses and criticised a lack of action by Mr Sunak.

The British Beer & Pub Association (BBPA) has said pubs are now expected to lose out on almost £300 million in trade this Christmas and pleaded for new funding from the Chancellor.

Chief executive Emma McClarkin said: “Although no new restrictions have been announced, the message to not socialise is hugely damaging to our sector.

“The Government must take responsibility and step in to save pubs this Christmas.

“We’ve written to Chancellor Rishi Sunak as a matter of urgency to provide the vital furlough and grant provisions our pubs need, in addition to VAT and business rates support.

“Without support pubs across the UK have a real fight on their hands for survival.”

Elsewhere, the leader of Westminster City Council has said people cancelling plans in the run-up to Christmas is having a “devastating” impact on hospitality and entertainment businesses in London’s West End.

Rachael Robathan said: “The situation is deteriorating daily for our theatres, restaurants and bars – widespread cancellations are having a devastating effect and I fear for many hospitality and creative jobs.

“In Westminster we have 3,700 restaurants, clubs and bars – the largest number of any local authority – and it’s a sector that supports 80,000 jobs.

“The curtain is coming down on production after production in the West End, and it is heart-breaking after Theatreland had only just got going again.

“I have already written to Rishi Sunak asking for help, but we don’t have time to deliberate – the Government needs to step in and act now to avoid permanent damage to the economy of central London.”