Hospitality trade bodies urge government to 'act now' to relieve cost of living crisis

Hospitality trade bodies have urged the government to “act now and take measures immediately” to alleviate the impact of the cost of living crisis.

Chancellor Rishi Sunak is reportedly set to announce an emergency support package, designed to help tackle the hike in energy prices, as soon as this week.

Emma McClarkin, chief executive of the British Beer & Pub Association, has called for an energy price cap for small businesses that could guarantee fair deals for operators across hospitality and beyond.

She said that this scheme would “reduce the disproportionate tax burden on the sector from business rates to VAT to allow pubs and brewers to get back on their feet instead of placing more barriers in the way of their recovery”.

Hospitality businesses had felt let down by Sunak’s spring statement in March, which failed to commit to a permanent reduction in VAT and offered a limited discount on business rates.

McClarkin added: “It is right that the government helps those who are struggling, however, this is an acutely painful time for business as well – we need the government to act now and take measures to immediately bring down costs and alleviate the pressures on our pubs and brewers. The fortunes of the beer and pub sector hang in the balance.”

Mark Laurie, stakeholders director from the Nationwide Caterers Association, a trade body representing the interests of independent food and drink businesses in the UK, asked that the government consider providing tiered support depending on the size of the business.

He said: “Many small businesses think days and weeks ahead, not months or years. Any support for business needs to consider the differing needs of micro and small [hospitality] businesses from the larger players. My concern with government support for businesses is that it might miss micros and independents again.

He added: “Ideally government action will be well targeted to support those in most acute need and to rebuild wider consumer confidence so that people will feel able to continue to enjoy great hospitality over the coming months.”

UKHospitality chief executive Kate Nicholls said the government needed a "two-pronged approach" to both boost consumer confidence and ease business costs.

Nicholls added: “[The] specific policies could vary significantly, from measures such as business rates rebates, easing green levies in return for businesses investments in sustainability, or looking at reducing barriers to our labour market, so that venues can increase trade. There are myriad possible levers that can help, but they need to come soon and deliver speedily.”

The soaring cost of energy is just one of many challenges that hospitality businesses are currently facing, which include staff shortages, food and supply chain inflation, and economic recovery from the pandemic.

Shortages in cooking oil have led restaurants to cut back on fried dishes, while a leading Scottish wholesaler has warned of a bottled beer shortage as a result of rising production costs.