Budget 2020: UK govt provides relief for a 'very small proportion' of the MICE sector

Industry leaders say the budget doesn’t take into account the impact of the Covid-19 outbreak on larger businesses.

The Chancellor Rishi Sunak revealed a £30 billion plan to boost the UK economy amid the coronavirus outbreak, including a £5 billion emergency response fund to support the NHS and other public services in England.

After the events and hospitality sectors pleaded for more financial support from the government, feeling immediate business strain and event cancellations, the budget set out the following measures to help smaller businesses.

Small business rates abolished for 2020

Business rates for small venues and businesses – those worth below £51,000 – have been scrapped for a year. On top of what the Chancellor described as this "exceptional step" businesses eligible for the small business rates relief may also be eligible for a £3,000 cash grant, equating to a £2 billion injection for 700,000 small businesses.

Loan access for businesses

A coronavirus loan scheme will cover the cost of salaries and bills, which will offer loans of up to £1.2m to support small and medium-sized businesses, covering up to 80% of losses with no fees.

Statutory sick pay and sick pay relief

Statutory sick pay will be available to anyone advised to self-isolate, with statutory sick pay from day one, rather than day four. The 111 telephone service will provide sick notes.

The chancellor also said it will be “quicker and easier” for those who are self-employed to get benefits.

Firms with fewer than 250 staff will be refunded for sick pay payments for workers off sick for up to 14 days. The budget has allocated £2 billion to cover these sick pay costs.

Industry response

Events industry leaders have welcomed the financial relief, particularly for smaller and medium-sized businesses. But they issued stark warnings that the relief doesn’t go far enough particularly for larger businesses.

Budget 'fails to take into account' impact on larger businesses

Jane Pendlebury, the CEO of HOSPA, the Hospitality Professionals Association, said: “We appreciate that allocations within the budget should be channelled toward the NHS as a priority. However, for hospitality businesses, the fear of coronavirus is multiplied, presenting not just a threat to life, but also a threat to livelihood.

“The impact on the hospitality industry is already pronounced. With travel restrictions abounding across Europe and beyond, we’ve already seen international trade heavily affected.

“The prospect of a nationwide lockdown in the mould of Italy is very real, meaning the situation is likely to get far worse in the coming weeks and months as domestic bookings disappear.”

She added: “In light of this, the Chancellor’s move to remove business rates bills for a year for hospitality businesses with a rateable value less than £51,000 simply doesn’t go far enough. That’s a very small proportion of the sector, and fails to take into account the impact on hotel chains, larger independent properties and even mid-sized pubs and restaurants.

“These are the businesses that pay the highest rates, contributing most to the economy, while also employing the largest workforces. There's nothing in the budget for them.

“…As an industry, we were hoping for more support from today’s budget and a greater scope in the scale of relief.

“A cancellation in a rise in beer, wine and cider duties, whilst a boon to the man in the pub (if it’s open!) and one that’s usually celebrated by the public is, I’m afraid, small beer in the wider context of what we’re presently faced with.”

HBAA 'delighted' for smaller businesses

Lex Butler, chair of events and hospitality association HBAA, said: “Many HBAA members – hotels, venues and agencies – are SMEs and they are expecting to experience significant cash flow problems as a result of the Coronavirus issue.

“So we’re delighted by many of the Chancellor’s Budget initiatives that will alleviate the pressures that they will face. The 12-month abolition of Business Rates for smaller businesses; the extension of this to include the leisure and hospitality sector; the coronavirus temporary business interruption loan scheme and the refunding of sick pay for staff off sick for up to 14 days will all benefit our smaller business members.

“The freeze in fuel and alcohol duty and the investments in roads will also help the whole of our industry. The cancellation and reduction of meetings and events is already impacting on everyone in our industry so these measures are all very welcome.

“While we would have liked support for training, addressing the immediate issues that we are facing is rightly the priority. As this industry generates £43 billion each year for the UK economy, we hope that the Government will keep the issues that the industry is facing under ongoing review and take further steps to ensure that this valuable sector doesn’t decline into disrepair through lack of support.”

UKinbound says relief 'does not go far enough'

UKinbound, the trade association representing inbound tourism, CEO Joss Croft said: “My association has been receiving increasing numbers of calls from members desperately worried about their businesses, which have been severely impacted by COVID-19.

“Specifically, some of our members have told us that their only option now to ensure the viability of their businesses, is financial support from the Government. At first glance, the chancellor’s Budget will come as a relief for many tourism and hospitality businesses, with its package of measures and support to mitigate the impact of the virus.

“We particularly welcome the business interruption loan scheme and deferment of tax payments. Business rate relief for small businesses with a rateable value under £51k and a review of business rates are also to be welcomed.

“However, the Government needs to recognise that businesses that do not qualify for this support will also suffer, as this rate relief does not go far enough.

“Speed is of the essence here in making this support accessible to the industry, as some businesses may only have a few weeks left to survive.”

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