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Hospitality underwhelmed by Chancellor's £1bn rescue package

Published:  22 December, 2021

Businesses are split in their response to the Treasury's £1 billion support package, with enthusiasm from some quarters, while others have claimed that the amount “borders on insulting”.

The industry is facing a growing crisis, with mass cancellations in the run up to Christmas and New Year coming on the back of a tough and often restricted trading year, meaning the very real prospect of financial ruin for more businesses. England’s on-trade operators are being hard hit, as are those elsewhere in the Union.

Scotland's First Minister Nicola Sturgeon announced yesterday that pubs and other hospitality venues selling alcohol must reintroduce table service and one metre physical distancing between groups of customers from 27 December for a period of three weeks.

Meanwhile, nightclubs in Wales will close after Boxing Day and both Westminster and the UK's devolved governments are expected to outline further restrictions before the New Year.

In light of these new restrictions and their devastating effect on hospitality footfall, the Chancellor has set aside £683 million in grants to be distributed among hospitality and leisure businesses in England.

The fund comprises of a one-off grant of up to £6,000 per premise for eligible businesses. In addition, the government has offered a £102 million top-up grant for local authorities to support other businesses.

There is also a 'cultural recovery fund' of £30 million, and an additional £154 million for Scotland and Wales via the Barnett funding.

Rishi Sunak has also brought in a statutory sick pay rebate scheme, designed to reimburse employers in the UK with fewer than 250 workers for the cost of paying statutory sick pay for Covid-related absences for up to two weeks.

Responding to the measures, UKHospitality CEO Kate Nicholls said: “This is a generous package building on existing hospitality support measures to provide an immediate emergency cash injection for those businesses who, through no fault of their own, have seen their most valuable trading period annihilated.”

She added: “It will help to secure jobs and business viability in the short term, particularly among small businesses in the sector, and we particularly welcome the boost to funds for the supply chain and event and business catering companies so badly affected by the reintroduction of work from home guidelines.”

However, Michael Kill, chief executive of the Night Time Industries Association, was scathing in his assessment of the support's inadequacy.

“Businesses are failing, people are losing their livelihoods and the industry is crippled. Mixed messaging, coupled with additional restrictions, have had a catastrophic impact on our sector over the last two weeks,” he said.

“Every pound of help is much needed. But this package is far too little and borders on insulting.”

There has also been frustration this week concerning Scotland's decision to not to restrict aid funding to specific venues and businesses.

Colin Wilkinson, managing director of the Scottish Licensed Trade Association, commented: “The key focus for the Scottish Government must now be to ensure that the £66 million aid package announced last week for the hospitality sector is made available as soon as possible.”

He continued: “However, the SLTA is particularly angered that this funding will not be specifically directed to those businesses that need it the most. It is utterly indefensible for businesses such as cafes, takeaways and even multinational fast-food outlets which have not experienced the decimation that has been caused to the licensed hospitality sector at this vital trading period to now receive the same level of support funding as those hit by the PHS messaging to defer Christmas parties in Scotland’s pubs, bars and restaurants.

“We understand this funding will be available in early January and the distribution of the additional funding of £275m announced today is still to be decided and it is hoped that this will become available towards the end of January.”

Social media has been alive with complaints and criticisms from on-trade and hospitality operators, with a tweet by chef Ellis Barrie of The Marram Grass in Anglesea summing up the mood.

“Please guys 6000 pound is an insult... I know for some it seems like a lot of money, but it really does not cut the mustard in the normal operation of a restaurant. Never mind an amount for restaurants trying to recover from two years of hardship.”