Chancellor George Osborne today offered hospitality businesses a small signal of recognition for its contribution to the UK economy and jobs but more needs to be done, says British Hospitality Association CEO Ufi Ibrahim.
With one in every ten people in the UK working in the hospitality and tourism industry, the Budget Statement 2014 offered an opportunity to win front line support. The BHA welcomed some policy changes, but asserted that government needs to do much more to support hospitality and tourism businesses and must recognise the intensively competitive international market in which they operate.
Announcements welcomed by the BHA include:
- Air Passenger Duty branding reform which will make long distance flights cheaper for those returning to the UK
- Added funding for the Apprenticeship Grant for Employers of 16 to 24 year olds which will help to deliver the apprenticeship pledges from the BHA’s flagship Big Hospitality Conversation which, in just its first year, has created over 34,000 opportunities for young people across the United Kingdom.
- Cuts in Alcohol Duty rates which show the government understands the importance of pubs as a community asset
- The doubling of Annual Investment Allowance to £500,000 until the end of next year was welcomed but the BHA proposes that business planning – especially for SMEs - needs longer timelines and that the Annual Investment Allowance should be extended at least until the end of 2016.
BHA CEO Ufi Ibrahim said: “The UK hospitality and tourism industry is operating in the most fiercely competitive international market and we need to be looking outwardly and creating financial policies which allow us to better compete with countries who are already acknowledging this like France, Germany, Spain and Italy. Today’s Spring Statement showed some small signs of recognition from the Chancellor on issues like APD, the Apprenticeship Grant and the Annual Investment Allowance, which the BHA welcomes, but there are other more lucrative ways to increase our competitiveness as a nation, for example by funding more improvements to obtaining tourist and business visas and the reduction of tourism VAT.”
Martin Couchman, Deputy CEO of the BHA also pointed to missed policy opportunities for example not including hotels in the Enterprise Investment Scheme. He said: “Hospitality businesses should be brought back into the Enterprise Investment Scheme to help secure necessary funding for refurbishment of the premises. Some of our smaller regional members have told us they have found it difficult to secure bank finance, with the result that necessary refurbishment and improvement of premises cannot take place. Another driver of growth which our members would have liked to see is a cut in employer’s NI to create more employment opportunities.”
Finally, The BHA expressed concerns about the slow progress of the Financial Conduct Authority (FCA) supervised review of Interest Rate Swaps and urged a rethink on the exclusion of embedded fixed rate business loans from the FCA supervised review. Today’s Spring Statement failed to include this issue.