Cumbria Tourism, which has been lobbying for a package of winter support for the sector, has welcomed this afternoon’s announcements by the chancellor Rishi Sunak, as a step in the right direction.
The key announcement was that VAT will be temporarily cut from now until 12 January 2021, down from 20% to 5% for hospitality and tourism businesses. This applies to the food and drink sector, accommodation providers and attractions, and will benefit more than 150,000 businesses and their customers nationwide.
Describing the move by the chancellor as a “welcome direction” to aid the UK’s long road towards recovery in the aftermath of the economic effects of Covid-19, Cumbria’s official destination management organisation hopes it will bring much needed support to many businesses, as well as incentivising visitors, in the next few months.
Cumbria Tourism has been calling for an extension to the furlough scheme, however the Government has announced this will wind-down by October. Whilst the chancellor did introduce a new policy to incentivise employers to bring staff back to work with the new jobs retention scheme via £1,000 per employee who returns to work until January next year, the fear is that this will not go far enough to protect many thousands of the jobs at risk.
Further measures to get the tourism and hospitality sector moving includes the government’s “Eat Out to Help Out” scheme, designed to get customers back into cafes, pubs and restaurants. From August, every household will be entitled to dine at a discount at participating businesses, where meals from Monday to Wednesday will be sold at a 50% discount (of up £10), including children’s meals and non-alcoholic drinks.
Vice Chair of Cumbria Tourism, Dan Visser, says, “Cumbria Tourism has been lobbying hard to secure a winter package and listened keenly to today’s announcement.
“Our businesses have been working very hard behind the scenes to be able to re-open in a Covid-secure manner, with many of them qualifying to display the ‘We’re Good to Go’ quality stamp by VisitEngland, which means they have met the criteria to responsibly welcome visitors back.
“This afternoon’s announcements offer a series of positive initiatives and I am hopeful that the VAT and voucher announcements will result in increased demand for food, accommodation and attraction providers, which should be a real boost for our sector. We hope to see these moves stimulate demand and build on the good work that has been done by businesses already.”
The chancellor also announced a £2bn “kickstart scheme” to create more jobs for young people, which Cumbria Tourism hopes will help to bolster the local workforce.
Cumbria Tourism’s Managing Director Gill Haigh says, “Although the past weekend has gone reasonably well for the sector, overall demand hasn’t been anywhere near where we need it to be at this time of year. While some businesses have reported encouraging signs in recent days, there are many others which say the number of visitors is still a long way from where it needs to be. This extra support announced by the chancellor today is welcome and it will, we hope, support an immediate boost. However, it doesn’t remove business concerns about when the furlough scheme comes to an end.
“Cumbria is heavily reliant on tourism, which inevitably meant we had some of the highest furlough rates, so it’s encouraging that the government has listened to our lobbying and heard the concerns of our brilliant businesses across the county. However, it is absolutely essential that some businesses do not fall through the cracks again.
“Over the coming weeks and months, Cumbria Tourism will very closely monitor visitor volume and value as well as the impacts of the chancellor’s announcements, and we will be sharing our findings with the government on a regular basis so they can hear first-hand how well these new measures are working for this critical sector, which not only benefits those working in the industry, but every single person who lives here too.”