The hospitality sector has praised new support measures announced by Rishi Sunak, but pointed out that there is more to be done to enable them to survive in the crisis.
Director at Greater Birmingham Chambers of Commerce, Henrietta Brealey, said:
”These are positive moves from the Chancellor answering many of the urgent calls for action put forward by business organisations and local stakeholders.”
Director at Greater Birmingham Chambers suggested that without the governmental support scheme many hospitality businesses in Birmingham would close.
Brealey added that long-term plans for hospitality businesses should be put in place as for now many people, who were paid minimum wage or living wage will be receiving 73% of their normal wage. “There is still more to be done to support businesses through the crisis ,”she said.
The organisation UKHospitality represents hotels and accommodations, food services management, attractions and leisure and pubs and bars. As the sector is broad there are still some gaps in a support scheme and there are concerns that events and conference centres are not given enough attention from the government according to the Birmingham Chambers of Commerce.
Robert Elliot, President of Solihull Chamber of Commerce, said:
“I am still concerned that the conference and events industry is largely forgotten. I sincerely hope that while too late for many, these measures may save some jobs and businesses.”
Birmingham NEC centre, which mostly hosts conferences and events, exhibitions, postponed the majority of their events for next year and made 450 staff redundant according to Greater Birmingham Chambers. The organisation was “concerned” that Birmingham NEC will be hard to put into the specific “hospitality” category.
At the beginning of the pandemic the hospitality sector was asked to closed all venues from 23rd March to limit the spreads of COVID-19.
In September the government announced the first extra measures.
UKHospitality response:
Kate Nicholls, UKHospitality Chief Executive, said:
“This is a hugely generous package of support and very welcome news just when we needed.”
Nicholls added in her press statement that the Job Support Scheme is a lifeline to hundreds of thousands of people employed in hospitality. Those grants will help businesses, which struggle with reduced number of customers and ongoing costs.
She believed that financial support will give businesses the chance to survive until 2021 and overcome challenges, which the sector is facing. Nicholls added that keeping businesses running will improve the British economy, supporting the country’s recovery plan.
The data from UKHospitality shows that:
- The sector employs 3.2 million people (10% of UK employment)
- The hospitality sector operates around 65,000 venues
- The hospitality sector brings £130 bn in economic activity, which generates £39 bn of tax for the Exchequer (funding vital services)
Economists’ response
The Office for Budget Responsibility showed that current government spendings, which are covering COVID-19, are 33% higher than a year ago.
The net public borrowing also raised up to £208 bn, which means that public debt will rise as well. Current circumstances put UK economy in uncertainty according to OBR.
John Fender, Professor of Macroeconomics at University of Birmingham, said:
“Taxes will have to rise in the next few years to avoid a rapidly increasing public debt, but the national debt will still rise considerably as well.”
