Budget receives mixed response from trade associations
There has been a mixed response from trade associations to chancellor Rishi Sunak’s first Budget, which he revealed to the House of Commons, 11 March.
Broadly, the business interruption loan scheme has been welcomed, as has sick pay, but questions remain over the abolishment of business rates for some businesses.
Joss Croft, CEO of travel trade association UKinbound, said that at first glance, the Budget will come as a relief for many tourism and hospitality businesses. He singled out the business interruption loan scheme as a notable positive.
Croft said: “Over the last few weeks, my association has been receiving increasing numbers of calls from members desperately worried about their businesses, which have been severely impacted by Covid19.
“Specifically, some of our members have told us that their only option now to ensure the viability of their businesses, is financial support from the government. At first glance, the chancellor’s Budget will come as a relief for many tourism and hospitality businesses, with its package of measures and support to mitigate the impact of the virus.
“We particularly welcome the business interruption loan scheme and deferment of tax payments. Business rate relief for small businesses with a rateable value under £51,000 and a review of business rates are also to be welcomed.
However, Croft added that the government needs to recognise that businesses that do not qualify for this support will also suffer, as the rate relief “does not go far enough”.
Croft warned that some businesses were in a perilous position, saying: “Speed is of the essence here in making this support accessible to the industry, as some businesses may only have a few weeks left to survive.”
Jane Pendlebury, the CEO of the Hospitality Professionals Association (HOSPA), was more critical, and expressed concern that, the chancellor’s move to remove business rates for a year for hospitality businesses with a rateable value less than £51,000 is not sufficient.
Pendlebury said: “That is [qualifying businesses] a very small proportion of the sector and fails to consider the impact on hotel chains, larger independent properties and even mid-sized pubs and restaurants. These are the businesses that pay the highest rates, contributing most to the economy, while also employing the largest workforces. There's nothing in the budget for them.”
Lex Butler, chair of the Hotel Booking Agents Association (HBAA), was overall more positive, saying the association was “delighted by many of the chancellor’s Budget initiatives that will alleviate the pressures that they will face.”
She went on to praise the 12-month abolition of business rates for smaller businesses and the extension of this to include the leisure and hospitality sector, as well as the loan scheme introduction and sick pay.
She added: “The cancellation and reduction of meetings and events is already impacting on everyone in our industry, so these measures are all very welcome. While we would have liked support for training, addressing the immediate issues that we are facing is rightly the priority.
“As this industry generates £43bn [£70bn when including outdoor events] each year for the UK economy, we hope that the government will keep the issues that the industry is facing under ongoing review and take further steps to ensure that this valuable sector doesn’t decline into disrepair through lack of support.”