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Pubs and restaurants demand furlough extension in March Budget

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Tom Belger
·Finance and policy reporter
·2-min read
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Empty seating awaits bar and restaurant customers on a wet and rainy day in Covent Garden during the second wave of the Coronavirus pandemic and when the capital is designated by the government as a Tier 2 restriction, on 21st October 2020, in London, England. (Photo by Richard Baker / In Pictures via Getty Images)
Hospitality figures are calling for more help for firms. Photo: Richard Baker / In Pictures via Getty Images.

Chancellor Rishi Sunak is under fresh pressure to hand businesses a lifeline in his upcoming Budget, with calls to extend the furlough scheme until the end of June.

The finance minister has repeatedly extended the coronavirus job retention scheme (CJRS) as the crisis has raged on, helping to cushion the blow of the pandemic and lockdown curbs on employers and their staff.

Trade body UKHospitality has written to the chancellor urging him not to cut back on the subsidies and other business support measures in the coming months. Sunak will unveil further tax and spending plans in his Budget statement on 3 March.

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The group, representing pubs, hotels, bars, cafes, caterers and other hospitality firms, is calling for:

  • A job retention bonus for employers who keep furloughed workers on, a policy announced and then scrapped when furlough was extended last year.

  • Another 12-month VAT cut to 5% to boost economic activity, and a widening of eligibility to ensure it applies across the “broad” hospitality sector.

  • Another business rate holiday for hospitality firms.

  • An extension to the repayment period for government-backed loans to 10 years, with another year interest-free.

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Chief executive Kate Nicholls said some companies in her sector had “gone to the wall,” and around 650,000 jobs had been cut.

But she said government support so far had been vital in helping many more businesses to “cling on.”

“A wide-ranging package of financial support will give hospitality businesses the best chance of not just surviving the remainder of the crisis, but leading the UK’s economic recovery in the years ahead,” she said.

“If we get what we need, hospitality can spearhead the economic recovery of the country, revive high streets and provide employment and investment in every single region.”

READ MORE: UK inflation rate doubled in December despite economy’s struggles

It comes a day after the Confederation of British Industry (CBI) also backed an extension to the CJRS to the end of June, with “targeted” support after that to give firms certainty.

The CBI also backed a business rate holiday extension by at least three months for companies forced to close, and a widening of support to cover their supply chains.

But it urged action sooner than the March Budget.

“Many tough decisions for business owners on jobs, or even whether to carry on, will be made in the next few weeks. If the Government plans to continue its support then I urge them to take action before the Budget which is still more than six weeks away,” said Tony Danker, new director-general of the CBI.

The Treasury has been approached for comment.

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