Subscriber login Close [x]
remember me
You are not logged in.

Business group calls for £35bn support package to prevent financial ‘oblivion’

Published:  02 February, 2021

The Independent Business Network (IBN) is the latest business group to call for financial help for the pub and restaurant sector in the wake of the Covid-19 pandemic. 

The group, which champions the needs of family-run and family-owned businesses across the UK,

has called for the Chancellor to implement a “radical” £35bn set of measures to safeguard 500,000 jobs and save Britain’s ailing pubs, restaurants and local high streets from “financial oblivion”. 

The call follows news that up to 310,000 jobs across the hospitality and tourism sector are at risk without an extension of the reduced 5% VAT rate.

IBN said that the economic collapse in Britain’s hospitality sector, which is responsible for over three million jobs, accounts for roughly one-third of the overall slump in GDP. 

The group has published a report called ‘Ailing Pubs, Deserted Restaurants and Vacant High Streets: A strategy to save Britain’s Hospitality and High Street Economy’ which outlines its calls for more support. 

IBN has called on the government to implement a “swathe of measures”, including halving the amount hospitality venues pay in alcohol duty and extending the suspension of business rates for a further 12 months. 

It is also calling for the existing reduced VAT rate of 5% for the hospitality sector to be maintained while extending it to include sales on alcohol. 

The report argues that in many cases the fate of the hospitality sector is intimately linked to the future of Britain’s high streets. A strong retail presence in Britain’s high streets increases footfall for the hospitality businesses, while the availability of pubs and restaurants encourages customers to participate in retail shopping.  

The report also calls for the freezing of parking charges for 2020-2021 and the reintroduction and expansion of the ‘eat-out-to-help-out’ scheme to include sales on alcohol. 

Chairman of the IBN, John Longworth, said: “The comprehensive £35bn package of measures we have set out here today are vital to saving our pubs, restaurants and high streets from financial ruin. We urge the Government to adopt them and save up to 500,000 jobs and countless family run businesses from destitution. After all, the parlous state our hospitality industry is facing is a symptom of the Government’s own actions.”

The full list of measures:  

  • Provide hospitality businesses with a COVID-investment rebate - £690m
  • Extend hospitality’s reduced VAT rates for remainder of 2021 - £6.3bn
  • Include alcohol in hospitality’s reduced VAT rates - £750m
  • Cut in half Britain’s alcohol taxes - £1.8bn
  • Make hospitality investments 100 per cent First Year Allowance (FYA) - £1.15bn
  • Continue the suspension of business rates 2020/2021 - £15bn
  • Cut VAT rate payable by physical retailers to 14 per cent - £7.6bn.
  • Freeze town centre parking fees - £872m
  • Reintroduce ‘eat-out-to-help-out’ and complement it with a ‘pro-hospitality’ advertising push - £1.08bn.