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Independent Welsh Hospitality Businesses Welcome Budget Statement

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The Welsh Independent Restaurant Collective (WIRC) has welcomed further support for the ailing hospitality sector from the Chancellor, Rishi Sunak. 

But, with many businesses across Wales in survival mode, it has stressed that the gaps in funding and the absence of a clear timetable to reopening still leave the sector still in a desperate state.

The WIRC represents nearly 400 independent hospitality businesses across Wales.  It was set up in April 2020 to respond to the challenges of Covid-19 and to give a voice to those family-owned bars, cafés, restaurants and pubs which form such a big part of the Foundational economy in Wales, and which will have been closed for 38 out of 52 weeks by 20th March.

Today’s budget announcement included a continued cut in the VAT rate for hospitality to 5% (until September, followed by 12.5% until April 2022) which will benefit the future viability of most businesses, although it has no effect until businesses in Wales are allowed to open. The benefit for wet-led pubs and bars (when they do open) will also be more marginal than it is for hotels, restaurants and cafés, as the rate cut does not apply to alcohol.

The confirmation of a further 12 months of business rates relief for the hospitality venues in England will be key to allowing businesses to manage their overheads, trade viably and reduce their debt burden. However, hospitality businesses in Wales are now waiting to hear from Welsh Government on what their policy on business rates will be.

Natalie Isaac, Director at the 44 Group with restaurants across South Wales and Bristol, commented,

“The VAT cut can help businesses like ours rebuild our balance sheets but we need a rapid announcement from the Welsh Government that business rates relief will continue, particularly in city centre venues such as ours where rates are such an enormous burden”.

Whilst all businesses have still carried the financial burden of paying NI contributions throughout the year, the WIRC has welcomed the continuation of the Furlough scheme until 30th September.

But Natalie Isaac summarised, “At the same time, we are asking the government to remain resolutely focused on developing a route map to allow the hospitality workforce, many of them recent school leavers and graduates, to be back in the workplace as soon as possible”.

WELSH GOVERNMENT SUPPORT “DISCRIMINATES AGAINST SMALLEST BUSINESSES”

On the same day as these budget announcements, the Welsh Government announced it is directing a further £30m of support funding for a small section of the hospitality and tourism industry, while thousands of smaller venues (known as micro-businesses) will be left without meaningful funding at a time when they are still unable to trade.

This latest round of the Economic Resilience Fund is targeted at those businesses with 10 or more employees to help cover their fixed operating costs while closed.  Any business with less than 10 employees – the vast majority of the community pubs, cafés and restaurants in the high streets and villages of Wales – is excluded from the scheme.

Simon Wright, owner of Wrights Food Emporium, said:

“While WIRC welcomes the Welsh Government announcement that all businesses in the sector will be subject to a new £150mn package of NDR funding in March, the discrimination in the ERF funding will affect thousands of micro businesses which are the bedrock of the hospitality economy.

The exclusion of micro businesses from this new fund is difficult to understand.  It’s a fund to help businesses meet their fixed operating costs.  These costs didn’t stop on 29th January when these same businesses could access the scheme.  And they don’t stop just because they have less than 10 employees. Many of our members have lost staff in the last few months due to the ongoing uncertainty and are now further penalised and excluded from this effort by the Government to save jobs and businesses.”

The WIRC has also highlighted the careful yet aspirational timetable announced for the removal of restrictions in England; they stress that stakeholders in the Welsh hospitality sector – whether business owners, the workforce, banks and even the wider community – have reached the point where lack of similar clarity in Wales is causing damage every day.

Dan Warder, owner of Top Joe’s pizzeria in Tenby, said: 

“With hospital numbers on a dramatic downturn in Wales, and the vaccination programme on track, we look to the First Minister for a timetable that gives our workforce, society and all our stakeholders the confidence that they will soon be able to be considering a return to something approaching normality”.