The Night-Time Industries Association (NITA) has renewed its call for more direct support from the UK government after VAT cuts were announced today (Wednesday) for hospitality and leisure services.
Chancellor Rishi Sunak said in his summer statement that VAT will be cut from the current rate of 20 per cent to five per cent for the next six months on attractions, food, and accommodation.
The cuts for services, including pubs, restaurants, cafes, zoos and cinemas, lasts from July 8 until January 12, 2021.
Sunak said the move is a £4bn catalyst and will likely benefit more than 150,000 businesses and consumers.
However, Michael Kill, chief executive of NTIA, said the cuts are of no use if venues and clubs are unable to reopen due to other measures.
He said: “Whilst there is much to be welcomed in this announcement for many businesses, it leaves many in our sector beleaguered. Most of our members either can’t open at all due to social distancing, or can only open with reduced capacity resulting in more financial losses.
“It’s as if the Government is letting us slip through the cracks between the various well-intentioned schemes.
“A VAT cut when you just can’t open at all is not of any help. Late night venues in towns and cities across the country are facing catastrophe. That will be a tragedy for the business owners, their staff and their customers.
“But there will be a consequential set of problems when people, particularly youngsters, are left with nowhere to go for music and social entertainment. Instead, we’ll see a further rise in illegal raves and street parties which present a new set of challenges.
“We renew our call on the Government. You have to help us more with direct financial support.”
In addition, UK Music chief executive Tom Kiehl, said the VAT exemptions would be a “lifeline” for the the thousands of people who work in the music industry.
He said: “We will continue to push the Chancellor and the Government to extend the support for the self-employed. There is still no clear timeline for when live music can reopen, yet the furlough scheme will start tapering to an end within days.
“While other sectors are gradually reopening, large parts of the music industry are forced to remain closed. We need a continued package of employment support and help to ensure businesses have easier access to loans and other forms of finance.
“As the #LetTheMusicPlay campaign has shown, there is massive support for our world-leading music industry, which sustains 190,000 jobs and contributes £5.2bn to the UK economy. But we urgently need more Government support until the music business can get back fully on its feet.
“The Government’s £1.57bn support package that was announced on Sunday is welcome. However, we need to see the details of how that funding will be divided to ensure no part of the industry is left behind.”