Higher levels of coronavirus restrictions affecting 99% of England from 2 December will place irrevocable pressure on hospitality, retail and leisure businesses, industry experts have warned.
Business groups representing hospitality, retail and leisure businesses – including Canterbury BID – have united to launch the ‘Bounce Back Better’ campaign urging government to provide sector specific support.
Hospitality, leisure and retail (including personal care) represents 65% of businesses in Canterbury. UKHospitality has warned that the new Tier 3 system will result in 94% of hospitality businesses becoming unviable by March 2021. In Tier 2 it is 75% and even at Tier 1 25%.
The bounce back manifesto follows intense and thorough talks with businesses, Business Improvement Districts [BIDs], Local Authorities, destinations and industry bodies to provide options of support to help the UK economy ‘Bounce Back Better’. The manifesto outlines four packages which will provide a vital lifeline for hospitality, retail and leisure businesses alike.
- One-off grant for retail, leisure & hospitality businesses
- Pause National Insurance employer contributions for furloughed employees
- Extension of 100% business rates holiday for 2021/22
- Extension of VAT reduction scheme
FOUR ESSENTIAL ASKS IN THE ‘BOUNCE BACK BETTER’ MANIFESTO”:
1. ONE-OFF GRANT FOR RETAIL, LEISURE & HOSPITALITY BUSINESSES
We ask Government to provide a one-off ‘Bounce Back’ grant of up to £15,000 for retail, hospitality and leisure businesses in Tier 2 and Tier 3 across England and Wales with a rateable value of up to and including £150,000. This would support 137,000 businesses vital funds delivered in a manner Local Authorities are equipped to distribute at a total maximum cost of £2.05bn.
2. PAUSE NATIONAL INSURANCE EMPLOYER CONTRIBUTIONS FOR FURLOUGHED EMPLOYEES
For the furlough scheme investment to date of £47m to be fully effective, business support must reflect short and long term challenges.
While employees receive 80% of their salary through the extension of the furlough scheme, businesses are still paying out for National Insurance, placing greater strain on survival. At an average wage of £9.50 per hour, working 7.5 hours per day, 5 days a week, the National Insurance cost to a business in hospitality with 10 staff is £491.60 per week. Every month, on top of all the other costs, businesses will be paying out £1,966.50 – nearly two thirds of the upper limit of funding provided by the Government currently.
We ask Government to remove the burden of National Insurance from employers whose staff are on furlough, saving the average business £2,000 per month until 31st March 2021.
3. EXTENSION OF 100% BUSINESS RATES HOLIDAY FOR 2021/22
The ‘payment holiday’ for retail, hospitality and leisure businesses with a rateable value less than £51,000 earlier this year was an extraordinary and critical measure saving each business up to £25,000, a total tax cut worth over £1bn.
We ask Government to extend the 100% business rates holiday into 2021/2022 for businesses in the retail, hospitality and leisure sector. Every pound saved is a pound to help businesses stay trading and retain staff.
4. EXTENSION OF VAT REDUCTION SCHEME
The cut in VAT from 20% to 5% is a major boost for the hospitality sector enabling businesses to pass on a £4.1 billion saving onto consumers. With a vaccine becoming a reality in the coming months, our Bed and Breakfasts, hotels and restaurants could be a vital catalyst to local economic recovery.
Research by CGA for UKHospitality, the British Beer and Pub Association and the British Institute of Inn keeping found support on VAT and business rates are top of hospitality’s essential business support needs. Four in 10 affected businesses have stated that the government needs to extend its VAT cut to remain viable.
We ask Government to extend the VAT reduction from 1 April 2021 up to and including 31 March 2022.
Rishi Sunak, Chancellor of the Exchequer [18 March 2020], “We will support jobs. We will support incomes. We will support businesses. We will help you protect loved ones. We will do whatever it takes.”
Matthew Sims, Founder ‘Bounce Back Better’ campaign and CEO Croydon Business Improvement District says, “The government has provided assurances it will do whatever it takes to support British businesses and help them to bounce back from the coronavirus pandemic. Businesses are approaching a cliff edge and need the government to provide a parachute in sector specific measures to stave off mass closure and job losses. Now, more than ever, we need the Chancellor to stand by his promise to do whatever it takes.”
Lisa Carlson, CEO of Canterbury BID said: “We welcome the extension of the furlough scheme and the new round of grants but the financial support is disproportionate to the amount of money hospitality, retail and leisure businesses normally make this time of year. Added to that is the uncertainty of financial support beyond March 2021 which makes it incredibly difficult to plan. This isn’t just about Christmas festivities and gift-buying. It’s about people’s lives, their livelihoods and the businesses we love and cherish in our community.”
Bill Addy, Chair of the BIFD Foundation and CEO of Liverpool BID Company said: “The government has the chance to act now and lessen lasting damage to economic growth and jobs. The UK’s economy recovery rests on local businesses continuing to trade and generate employment opportunities. This manifesto asks the government to extend existing measures and introduce a one-off funding injection that together will stem the bleeding out businesses are facing.”
David Lewis, Café Des Amis & Café Du Soleil, Canterbury said: “Faced with being forced to shut and the resulting loss of all income for nearly 5 months and potentially more in 2020, the financial impact on our business is immense. With over 50 employees to support, rents which our landlords refuse to lower let alone waive, and all the other intrinsic costs associated with bricks and mortar businesses, the £2k grants that we receive do not begin to touch the sides of our losses. Other measures such as the reduction in VAT are very welcome, but of zero benefit if we are not allowed to trade in the first place. Hospitality urgently needs extra support now and going forwards to stay afloat and keep staff in employment, so that we have a fighting chance still to be here in the future, giving a heartbeat to our cities.”
Support the campaign
Visit www.raisethebarcampaign.com to download our assets
To get involved:
Matthew.simms@croydonbid.co.uk – CEO, Croydon BID – Founder #RaiseTheBar
Rachel.Pillard@canterburybid.co.uk – Canterbury BID
