Hospitality leaders warn of ‘severe contraction’ as Budget does little to alleviate closure concerns
High street industry leaders have issued bleak warnings for this winter following the Chancellor’s Budget, forecasting a wave of closures and stark price hikes for punters.
The OBR predicted that real household disposable income per person would plunge more than seven per cent over next two years, marking the biggest drop on record.
While businesses did welcome support on business rates, campaigners and industry groups said the policies set out by Chancellor Jeremy Hunt on Thursday morning fell short of what would help save the sector.
Hunt set out an £13.6bn package of support for English businesses, with the inflation-linked multiplier to be frozen in 2023-24, after the hospitality sector faced a £900m hike to their rates bill this spring.
Relief for 230,000 businesses in retail, hospitality and leisure sectors was also increased from 50 per cent to 75 per cent next year, to the relief of businesses.
UKHospitality boss Kate Nicholls said this help would help the high street breathe a sigh of relief but called for a root-and-branch reform of the business rates system, as set out in the Conservative party manifesto.
It was also confirmed that energy support would continue after April with targeted support for businesses particularly vulnerable to high prices. Industry groups said this confirmation was encouraging but called for more details about the level of support that would be available to firms.
Despite some welcome news for venues, the Chancellor had failed to set out “serious plan” for economic growth, with a blueprint urgently required, UKHospitality said.
“There is nothing to give firms confidence, let alone invest,” Nicholls said.
The fiscal statement had “not gone far enough and still lacks clarity,” according to nightclub trade body the Night Time Industries Association.
Businesses would”remember the fourth failed attempt to deliver a budget to safeguard businesses at the sharpest end of the crisis,” the trade body’s boss Michael Kill said.
There would be a “notable downturn” in consumer spending as the cold winter sets in, Sacha Lord, the night time economy adviser for Greater Manchester, warned.
“I’m hugely concerned that the policies outlined today will create a severe contraction in the sector,” Lord said, as Brits will cut back on dining out in order to save pennies and pounds.
Venues would also be forced to make “huge cuts” to staffing, slash opening hours, with fears that businesses could close “at a faster rate than seen during the pandemic,” Lord said.
Hospitality bosses had pleaded with the government to issue financial aid as the sector faces a “cost of doing business crisis,” with costs for energy, labour and food all surging this year.
The high street has also been grappling with consumers tightening their purse strings just as businesses need to hike prices to mitigate their own input costs increasing.
More to follow…