Industry budget reaction

Senior industry figures have been reacting to the chancellor’s Budget announcement. Rishi Sunak laid out a plan yesterday that he said ‘sets a path for recovery'.

Sean Haley, regional chairman of Sodexo UK and Ireland, said: “With strong sentiment around the government commitment to redrawing the economic map, the Budget speech took a positive and optimistic step towards the levelling up agenda. It had been extremely encouraging to see the Levelling Up Fund increased last week to £4.8bn and extended to become UK-Wide, so I had been waiting with interest to understand more about how the Fund – and indeed levelling up itself – will operate.

“I was left feeling optimistic about some of the measures being taken. This included the launch of the first round of funding and also the £150m commitment to enabling local communities to support theatres, sports clubs and other venues that may currently be under threat.”

UKHospitality chief executive Kate Nicholls commented on a number of aspects:

VAT
“An extension of the 5% VAT rate was absolutely crucial for hospitality businesses. Confirmation that the government will provide support for a full year will bring peace of mind to the sector. UKHospitality has been pushing hard for this and it was critical that it was delivered today.

“While it would have been better to have extended the 5% rate further, it is now vital that the government looks at introducing the interim rate for hospitality on a permanent basis. It would be a positive legacy of an otherwise dreadful year for our sector. A permanent reduced rate of VAT for hospitality would redress the unfair tax imbalance that our businesses have faced for too long and make us internationally competitive.”

Business rates
“It is great that this fixed cost has been eliminated during the recovery and is heavily reduced for the rest of the financial year. It will give some much-needed breathing room for businesses as they prepare to reopen, though the cap will impact some larger businesses. Not all businesses will be able to reopen swiftly, it will take them time to get up and running. They will be burning through meagre cash reserves as they do so, so this extra flexibility is going to crucial in ensuring as many as possible stay alive.”

Furlough
“The extension of the scheme brings stability and peace of mind to employees after a dreadful year of uncertainty. There is still a worry that it will place unnecessary pressure on fragile businesses just as they are beginning to get back to their feet, though.”