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Rishi Sunak Is Returning From US Early To Face Fuming Hospitality Bosses Over Lack Of Covid Support

Rishi Sunak Is Returning From US Early To Face Fuming Hospitality Bosses Over Lack Of Covid Support

Rishi Sunak is flying back from America early to deal with angry hospitality industry leaders (Alamy)

5 min read

Chancellor Rishi Sunak is cutting short a trip to California to meet with hospitality leaders who are demanding financial support as businesses are hit by a new surge in Covid cases.

Sunak and his deputy Simon Clarke held virtual talks from the US with industry figures this afternoon after the government was accused of putting pubs and restaurants in “lockdown by proxy”.

The chancellor has now confirmed he will return home to continue the talks in person. 

"I understand that this is a very concerning time for businesses up and down the country," Sunak wrote on Twitter. 

"My team and I held meetings with the hospitality sector earlier today. We’re listening to their concerns and will continue to work with them over the coming days."

The UK reported a record 88,376 new Covid cases on Thursday, by far the highest of the pandemic so far, as the highly infectious new Omicron variant continued to rip through the population.

No new measures that would require businesses to close have been introduced, meaning emergency financial support is not available. But government advice that encourages people to reconsider socialising in the run up to Christmas if they wish to spend time with their family has drastically reduced business in the hospitallity sector. 

The chief executive of the Shepherd Neame brewery, which operates around 300 pubs in the south of England, said his business had been thrown into a "zombie world”. 

A new survey by the British Institute of Innkeeping today shows “trade falling dramatically”, with more than half of pubs having to reduce their trading hours, and almost a quarter “already saying they will be letting staff go”.

The trade body said its members “are now reporting huge increases in cancellations of 75% or more, leaving them with food they cannot sell and staff they cannot afford to pay”.

“We need support for these essential businesses, now, not in the New Year, as quite simply they will not survive without it," Steven Alton, CEO of the BII, said.

“Our members have asked for vital support in the form of the reintroduction of grants, a continuation of the lower rate of VAT and a cancellation of business rates.

“The support and recognition that Government has given to them over the course of the pandemic was key to their survival, but without further and immediate support this Christmas, the investment in these businesses will be wasted and we will see widespread business failure.”

UK Hospitality boss Kate Nicholls said sales have already plunged by more than a third over the last 10 days, with £2billion of trade already lost in December.

"Last year, Christmas was cancelled and so much rested on this December period for businesses already staggering under a burden of debt incurred from the pandemic and facing rising costs across the board,” she said.

"If operators are unable to trade profitably over the next month, many will simply not survive – and those that do make it through face a return to 20% VAT in April.”

Sunak has faced criticism for traveling to California this week on a long-planned business trip as “plan B” measures to tackle the threat from the new Omicron variant of coronavirus came into force.

He was due to come back tomorrow but is instead flying home early to continue holding meetings with business chiefs.

This afternoon the Chancellor and Clarke, Chief Secretary to the Treasury, held one-on-one meetings with firms including Prezzo, Black Sheep Brewery, Nando's, the Confederation of British Industry and UK Hospitality.

But he did not announce any new package of financial support, instead saying the way to safeguard jobs and the economy was for Brits to get their vaccine booster jab.

Beer campaign group CAMRA’s chief executive Tom Stainer said he was glad to see Sunak meeting with hospitality leaders, but complained that the "wholly unacceptable" situation felt like a repeat of March 2020, when people were told to stay away from pubs, but because they remained open, funding was unavailable. 

"We hope the Chancellor will urgently deliver a new package of support including grants, business rate relief and furlough – this time available to brewers and the whole supply chain, rather than just publicans,” Stainer told PoliticsHome.

Alex Claridge, chef at the The Wilderness restaurant in Birmingham, urged the Treasury to “cut the bullshit”, and said if the industry continues to face disruption, furlough should be reintroduced alongside a new round of grants and help with VAT.

Sharon Graham, leader of the Unite union, also urged the government to bring forward a new package of measures to support hospitality staff.

"The uncertainty the Prime Minister is causing is devastating – workers don't know if they will even have a job to go to next week. This is an appalling position to put people in," she said. 

"Hospitality workers did not cause this crisis and they should not be the ones who pay for it.

"They still have rent to find and bills to pay but are seeing their incomes disappear before their eyes. They need help now."

Sacha Lord, Night Time Economy Adviser for Greater Manchester, said more than 80% of hospitality businesses are suffering cancellations “because of Omicron and the government’s measures,” and also called for the planned VAT rise to be scrapped.

“After all the trauma our industry has suffered over the last 2 years, it was this year’s festive season that was the lifeline hospitality businesses were waiting for, but it’s now slipping away,” he said.

“The government needs to ensure that it doesn’t create a panic, and that its response is based on data and actual evidence.”

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