Lockdown update by Nicola Sturgeon tomorrow as UKH calls for more support

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Ahead of Nicola Sturgeon reviewing Covid-19 restrictions in Scotland on Tuesday following SNP’s historic election win,  UKHospitality has called for further financial support for the hospitality industry.

The latest figures in Scotland over the weekend showed 200 new cases and no deaths and Nicola Sturgeon is expected to give the go-ahead for the country to move into Level 2 from May 17 which will mean that alcohol can now be served inside hospitality venues. However, the First Minister will confirm that tomorrow and will also lay out any changes to the original plan.

The country is due to move down from Level 3 to Level 2 of restrictions on that date.

The latest hospitality sales tracker for the first quarter of 2021 shows that the last year has seen a two-thirds loss of trade for the sector – equating to a fall in revenue of £80 billion. Even now, only around a quarter of hospitality businesses have reopened with sales massively subdued due to outdoor trading being hit hard by poor weather. Data from CGA’s Drinks Recovery Tracker shows the crucial Bank Holiday weekend was a washout for many operators, and drinks sales on Sunday (2 May) were down by 35% on the same Sunday in 2019 and dipped even further on Bank Holiday Monday (3 May) – down 66%.

As a result, UKHospitality has written to Chancellor Rishi Sunak for further support for hospitality and has raised the concern that out that hospitality operators are reporting that banks are denying them access to critical funding.

In the letter to the Chancellor, UKHospitality warns that the Treasury must stand ready to deliver extra support measures if there is any slippage in the roadmap for England and no doubt will echo that plea to the Scottish Government who have yet to set a date for lifting of restriction. The trade association is calling on the Chancellor to encourage the full lifting of restrictions beyond 21st June to ensure that hospitality can return to full strength, along with an early announcement for support should this not be possible.

The letter also highlights ongoing issues that sector businesses are experiencing when it comes to access to capital. While Government loan schemes have been received positively, UKH says there are real concerns in the sector about their rollout with many operators reporting that banks are denying them access to critical funding. As a potential solution to this challenge, UKH proposes working with the Treasury to develop a more targeted loan scheme that recognises the particular difficulties that the hospitality sector faces.

UKHospitality Chief Executive Kate Nicholls said, “The hospitality sector stands ready to play its part in helping to power the recovery, create jobs and reinvigorate local communities, but that will only be possible if our businesses return to viability at the earliest opportunity.

“Firstly, we need the Government to deliver on its commitment to dropping Covid restrictions and measures on 21st June. But even then, many companies will be facing huge rent debts and other business costs so access to capital through loans is critical to ensure they can get back on their feet again as soon as possible.

“The revitalisation of hospitality will yield a substantial return on investment – in terms of economic growth, employment, levelling up, high street regeneration and Government revenues. Brighter days are ahead but we urge the Chancellor to ensure that his welcome and substantial support for the sector doesn’t go to waste.”

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