Government Announcement of Tiers leaves Stratford in Tears
Following the Government' s review of Tier designations today, Joe Baconnet, BID Director of Stratforward BID said; “We are disappointed that the tier designation for Warwickshire hasn't changed, although not totally surprised given the increasing number of Covid cases locally and nationally in recent days. We really feel for all our BID members, not just our hospitality and leisure members who now have to remain closed, but also for our retail and personal care members who are suffering as a result of such a huge part of our town offer having to remain shut in this crucial trading period.
"It is now vital that the Government sets out a clear plan for the next few months for business, including a greatly enhanced financial support package for hospitality and leisure in particular. This is not a demand for a handout, but a request that the Government invests in normally viable businesses that will be needed to assist in the economic recovery of the whole country going forward. That investment will pay back in spades as businesses reboot and start adding to the public purse rather than relying on it.
"This is particularly important for Stratford where our local economy is so reliant on these sectors. It is critical that Government financial support comes quickly or we could see the recovery for us taking much longer than in other places. The Government has access to more than £2bn rates relief paid back by large retailers in recent weeks and this money could be used for an immediate support package along the lines of the Bounce Back Better Manifesto being called for across the business community.
"In March 2020, Rishi Sunak, The 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.' - the Government needs to act on this pledge now. “
Note to editors:
UKHospitality has already warned that the 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%.
We agree that sector specific measures require sector specific support, and the Bounce Back Better Manifesto outlines a range of packages which will provide a vital lifeline for hospitality, retail and leisure businesses alike.
The four key asks in the Manifesto are:
1.ONE-OFF GRANTS FOR RETAIL, LEISURE & HOSPITALITY BUSINESSES
Local Authorities lack the administrative and payments infrastructure required to facilitate monthly financial support model proposed by Government for eligible businesses in Tier 2 and Tier 3.
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 with vital funds delivered via local authorities who are equipped to distribute it . This would cost a maximum of £2.05bn. The large national retail chains have repaid their business rates relief to the tune of £2bn already. The money already exists.
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. Some of our businesses are paying out double on NI what their Tier 3 government grants are. This is not sustainable and will result in job losses.
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 the vaccine becoming a reality, our Bed and Breakfasts, hotels , restaurants, pubs and bars 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 the Government to extend the VAT reduction from 1 April 2021 up to and including 31 March 2022.