By Denis Sheehan, Publisher, H&C News: #VATsENOUGH.
As hospitality continues to reopen and rebuild, it now faces a cost of living crisis not seen in decades, inflation is rising fast causing consumers to cut spending and businesses to adapt accordingly.
Chef Paul AskewWe spoke today with chef and restaurateur Paul Askew who has spent more than 40 years in hospitality. Askew owns The Art School restaurant, The Art School Cellars, and The Art of Wine. He like countless others in the industry faces many challenges currently and told us: “It’s a big step for England today as the last Covid-19 restrictions are eased and I am really please to finally see this happen.
“As always, part of the picture is consumer confidence. We had that building from the summer into Christmas last year, then it was wiped out with Omicron, and since early January we’ve seen a sharp increase in bookings again. So as the last restrictions are eased it should encourage more bookings and walk-in trade the length and breadth of England in restaurants, bars, hotels, food markets and more.
“But this is not the key challenge facing us. My concern is more about VAT going back to 20% at the end of March. This is going to put a lot of businesses under huge pressure again. We have been asking for a permanent 12.5 or max 15% rate for hospitality. Rishi Sunak, the chancellor, has the opportunity of a generation to reset the sector correctly by keeping VAT at a permanent lower rate for hospitality to allow us to build back better invest in our teams conditions and pay to attract people back into the industry.
“The sector is also being hit with Covid loans being repaid, insurance policies which haven’t pay out, business rates at 50% finishing soon and commodities price rises and energy rises both going up. Brexit is causing huge and ongoing damage with supply chain issues and a staffing crisis still pervading our sector. And Covid itself has really damaged the sector too, so it’s a double whammy – so many people have left the trade and will not return.
“I do feel hopeful for a good recovery year but even with restrictions now gone it’s not the same as everything suddenly going back to normal again in hospitality, far from it.”
To deal with the economic realities facing our industry, further government support is essential. There are many levers government might pull to help hospitality secure a more rapid recovery and rebuild resilience faster, the most effective of these would be retaining the current 12.5% VAT rate.
UKHospitality’s #VATsEnough campaign is calling for just that.
The economic case for maintaining a reduced rate of VAT at 12.5% is as compelling for the government as it is for the sector. Our thorough analysis of key economic metrics highlights the benefits of a permanent reduction, as opposed to a return to 20%.
UKHospitality forecast’s maintaining the reduced VAT rate would stimulate hospitality by creating 125,00 full and part-time jobs – a full time equivalent of 85,000 jobs.
If you support the call for VAT being maintained at 12.5% there are resources available on the UKHospitality website to do just that – here.
Coworth Park brunch sees an end to paper receipts in hospitality
