Rishi Sunak cut short his stay in California and was flying back to the UK on Thursday night after furious business leaders demanded he put together a financial support package to help them survive a plunge in trade that they blamed on mixed messages from the government. The chancellor said he had spoken to representatives of the hard-hit hospitality sector and indicated he would be examining measures to help firms stay afloat, amid a flood of cancellations. Hospitality industry figures had earlier accused the government of turning its back on struggling businesses by “frightening” people into staying at home while failing to offer support to venues reeling from the resulting plunge in trade. The pub industry reported 3.2m cancellations last week alone and predicted 37m fewer pints would be sold, at a cost of £237m. Trade body UKHospitality estimated the cost to the wider industry at £4bn, with takings down by a quarter and expected to fall again by the same amount. Pub and restaurant bosses warned that firms would not survive the winter without an urgent package of financial support from the Treasury, calling for measures including: An extension of the VAT cut for hospitality. Expansion of relief on business rates. Immediate grants for struggling businesses. Greater state backing for the CBILS loan scheme. Targeted return of the furlough scheme. Many blamed a change in messaging amid the spread of the Omicron variant. At a sombre press conference on Wednesday, Prof Chris Whitty, England’s chief medical officer, told the public: “Don’t mix with people you don’t have to.” His tone was a sharp contrast to that of the prime minister, Boris Johnson, who continued to insist Christmas parties should go ahead and proclaimed that “a great national fightback has begun” with the acceleration of the booster jab programme. Chris Jowsey, the chief executive of 1,000-strong pub chain Admiral Taverns, said: “They’re frightening everybody into staying home but they’re not providing any support for the businesses that are most impacted.” He said city centre takings were down by as much as 70% after a wave of cancellations triggered by work-from-home guidance and Whitty’s comments on socialising, leaving businesses in dire need of a support package. “We’ve heard nothing from the chancellor and they must have known what the impact would be. It feels as if they’ve turned their back on the sector. If this carries on as it is, we’ll see businesses go under in January. Fact.” The British Beer and Pub Association is understood to have written to Sunak about the difficulties facing the sector, which the trade body said was hit by 3.2m cancellations last week, before Whitty’s comments. Phil Urban, the chief executive of Mitchells & Butlers, whose 1,700 restaurants and pubs include the O’Neills and Harvester chains, called for the Treasury to move faster. “In Germany, where we have a business, restrictions have gone hand in hand with the support,” he said. “Here we have restrictions and are left dangling, not knowing whether we’ll get anything at all.” Leaders across the sector called on the government to rethink plans to restore the VAT rate on hospitality to 20% in April, asking for a continuation of the current 12.5% rate or a return to 5%. The industry’s other key ask is a total moratorium on business rates, given that many firms, in particular those in city centres, are paying duty on venues where trade has dwindled. Bosses also called for immediate grants to support the sector and strengthening of the coronavirus business interruption state-backed loan scheme. Simon Emeny, the boss of London-focused pub chain Fuller, Smith & Turner, called for some form of targeted furlough to help venues in deserted city centres. “We’ve been left in no man’s land,” he said. As the industry demanded action from the Treasury, Boris Johnson’s official spokesperson appeared to hint that the government was moving towards offering more financial help for affected businesses. “We will listen. We understand the challenges that this new wave poses, and we recognise that the public are being more cautious given the prevalence of this variant. And so we will respond proportionately at all times, as we have before,” he said.
While emphasising that the prime minister was not asking businesses to close, he said: “We recognise that the prevalence of this variant and its high transmissibility is leading to further challenges for the hospitality sector, in particular.” Sunak spoke to businesses virtually from California on Thursday and said via his Twitter account that he would continue talks ahead of the weekend, saying he was “listening to their concerns”.
A spokesperson for Sunak said his trip was long planned, saying he had travelled to meet tech and investment leaders with a “packed schedule of meetings”. Sunak was originally due to return on Saturday, according to the BBC. Conservative MPs made clear they expected the Treasury to front up more money, accusing the government of imposing an “effective lockdown”. Steve Brine, a former health minister, said that “at a stroke, the chief medical officer changed government policy” at Wednesday’s press conference, and argued: “The Treasury is going to have to do more.” Wes Streeting, the shadow health secretary, had earlier called on Sunak to returnfrom California and “get a grip on the situation, because businesses need certainty and confidence now”. Streeting urged Sunak and the business secretary, Kwasi Kwarteng, to “hammer out a deal to help hospitality because they really need us right now”.