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Rishi Sunak is balancing the VAT cut and the cash boost for bars and restaurants after his return to the UK


Rishi Sunak is considering lowering value-added tax and increasing cash at struggling Omicron-spreading bars and restaurants after returning to the UK from his “long-planned” California vacation.

The chancellor is under fire from hospitality companies who have just returned from their “business trip” to the US to meet with tech chiefs, despite the Omicron variant spreading rapidly across the UK and leaving bars and restaurants dealing with waning demand.

Dubbed “California Chancellor”, Sunak saw photos from major cities in the UK showing just a few revelers enjoying the festive nights on what was supposed to be one of the busiest nights of the year – so-called Black Friday.

Boris Johnson advised the nation to be vigilant about the holiday period earlier this week, while Professor Chris Whitty’s call for people to limit social contact caused a wave of hospitality cancellations.

However, Mr Sunak returned to the UK for virtual talks with officials and the Prime Minister yesterday on the details of a possible new rescue package after a meeting with hospitality industry leaders on Friday.

Chancellor Rishi Sunak is pictured at Heathrow Airport as he returns from a ‘long-planned’ business trip to California

A single customer sits at the bar in a nearly empty bar in central London during the height of the coronavirus pandemic last year

A single customer sits at the bar in a nearly empty bar in central London during the height of the coronavirus pandemic last year

A source told the Sunday Telegraph that the Treasury is trying to “get an accurate picture of crisis points” for companies to determine what is needed from the government.

It follows a report by a Tory think tank that warned that government bailouts “reinforced a sense of entitlement” and left a “daunting task of restoring expectations”.

Bars lost almost all Christmas reservations overnight in the wake of government directives to work from home due to the growing threat from Omicron.

Wetherspoon president Tim Martin has also criticized ministers for pursuing “closure by stealth”, with pubs saying the new guidance has convinced Many punters are of the opinion that it is not worth going ahead with their festive gatherings.

A London hotel told MailOnline it was expecting £100,000 in losses from canceled events, rooms and covers – and said many employees feared for their jobs given how reliant the industry is on the lucrative Christmas period.

Chancellor and First Secretary of the Treasury Simon Clarke had calls with hospitality chiefs earlier this week.

Downing Street said some of the companies and organizations that took part were Prezzo, Black Sheep Brewery, Nando’s, Greene King, Whitbread, Adnams, Confederation of British Industry (CBI), Small Business Federation, British Chambers of Commerce and the Federation. For UK wholesale and hospitality distributors.

They have called for a new support package, similar to those introduced earlier in the pandemic, in order to stay afloat.

However, a government source told The Times it was “not in the same financial position” and should be “incredibly accurate” about allocating funding.

The once bustling streets of London's SoHo (above) were sparsely populated on Friday evening amid Omicron's fears.

The once bustling streets of London’s SoHo (above) were sparsely populated on Friday evening amid Omicron’s fears.

Industry experts fear that the government's growing warning messages about the Omicron mutant strain is affecting customer confidence in what should be the prime period for pubs, bars and restaurants.  Pictured: Soho is quiet on Friday

Industry experts fear that the government’s growing warning messages about the Omicron mutant strain is affecting customer confidence in what should be the prime period for pubs, bars and restaurants. Pictured: Soho is quiet on Friday

Some industry bodies have pushed for an increase in cash grants to mitigate the losses companies are expected to incur during the usually busy holiday period.

Others are understood to have urged Mr. Sunak to revive the emergency five per cent rate of value-added tax for hospitality and tourism companies and to re-release business rates of 100 per cent for retail businesses.

Mr. Sunak is said to be considering options including a new emergency value-added tax cut and an increase in cash.

The chancellor is also considering what additional help might be needed if other restrictions are imposed.

Prof Whitty warned at a press conference in Downing Street earlier this week that more Covid records would be smashed by the highly contagious variant Omicron.

He said people need to ‘prioritize’ people they meet in the run-up to Christmas or risk catching the virus and spending the holidays alone.

Amid a rebellion from Tory MPs, the prime minister has ignored calls by scholars to shut down the last Christmas holiday to quell the spread of Omicron, as ministers are said to be considering new restrictions after Boxing Day.

Professor Whitty and Sir Patrick Vallance, chief scientific adviser, were among the scientists who called on the Prime Minister to stop the internal mixing of separated families “too soon” and discussed the possibility of a two-week circuit-breaker pattern ban.

Despite this, a report from the Conservative Policy Forum called on ministers to ‘work for a smaller government with fewer laws and regulations’ – increasing pressure on Mr Johnson and Mr. to resist offering funding similar to the furlough scheme for businesses and workers.



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