Harrogate hospitality welcomes Budget support but tough times are not over yet
Harrogate businesses may be breathing a sigh of relief after the Chancellor unveiled a raft of new support measures this week but they are well aware the battle to begin recouping the extraordinary losses suffered by the town’s hospitality sector, in particular, is still going to be a tough one.
Yesterday’s Budget announcements - including extensions to the furloughing scheme, business rates relief and VAT cuts plus a brand new Restart Grant of up to £18,000 for hospitality and leisure businesses - have been broadly welcomed in Harrogate
Harrogate Business Improvement District (BID)chair Sara Ferguson said: “This week’s announcements have been good news and I’m sure it has been welcomed by businesses desperate to reopen their doors, but without the adequate finances to do so properly.
“I think there were a lot of positives in the Budget.”
But, she added the hospitality sector still faced a challenging time to come without long-term reform of the basic costs of doing business.
She said: “There needs to be a proper business rates review as this is a barrier to many people opening businesses, and a reason that many give when their businesses fold.”
Despite the Chancellor’s £65 billion spending package, it hasn’t stopped warnings in the town that we cannot expect an overnight recovery even as the economy prepares to start reopening.
Martin Greenhow, the owner of Mojo bar on Parliament Street in Harrogate has been one of the louder voices sounding the alert over the potential scale of the problem since the pandemic first struck.
The Government may have spent £25 billion on direct grants to businesses during the pandemic so far but last year was an ‘annus horribilis’ for the pub sector, with beer sales falling by 56% to their lowest levels since the 1920s.
Mr Greenhow said it would take some time for hospitality to recoup its losses after having to pay bills such as rent even though most businesses in the sector have been closed for much of the time over the last 12 months.
Mr Greenhow said: “We were told as an industry to stand down, sit on our hands and protect the populous - and we did it.
“It’s an incredibly unjust situation to find yourself in, where you are mortgaging your future for the benefit of all.
“We’re looking at town centres and city centres that could be decimated.”
The entrepreneur behind Harrogate gastro pub Three’s A Crowd located at West Park, John Quinlan, said he has been pleased with the Government’s support so far.
But rather than the build-up to the target date of June 21 for the end of lockdown being the crunch time, he says the hoped-for economic recovery was likely to involve a much longer battle.
Mr Quinlan, who intends to reopen Three’s A Crowd at the start of stage two in the Government’s roadmap out of lockdown on April 12 when the bar will be offering food and drink in its covered and heated rear terrace and heated front, said: “We have been pleased with the Government’s support to date.
“The next 12-18 months is going to be a crucial period for the economy and the hospitality industry. For our nation’s business to reopen and begin to recoup the extraordinary losses then the chancellor and Government must go further.”
Simon Colgan, owner of the Blues Bar on Montpellier Hill, is warning of the potential for future closures.
He said: “The new grants are very welcome, as is the suspension of the business rates. I can only speak for myself but I am sure for the larger site owners this is nowhere near enough to cover their on going costs and I am sure we will see lots of closures moving forward.”
A familiar theme among the owners of bars, cafes and restaurants in Harrogate is the need to allow customers to use public space outside if they are to be able to reopen at all in April in anything like a cost-effective way.
Mr Colgan, who also runs Empress on the Stray in Harrogate and the Worlds End in Knaresborough, said it would not be viable to open most of his bars in April if, in his words “we only had six tables outside”.
Mr Colgan said: “What would really help would be the local council granted us the use of the outside areas, especially during the period where the pubs are only allowed to served outside.
I think the general public really enjoyed being able to sit on the grass last summer and also had the extra benefit of feeling safer.”
The British Chambers of Commerce said that the Budget showed the Chancellor had listened to business communities.
But Sandra Doherty, chief executive of Harrogate District Chamber of Commerce is cautioning against complacency on the road ahead.
She said: “For many small businesses the offer of any grants will be very welcome and something they were hoping for. For many I fear the level of the grant will be too little and too late.
“The reality is that survival has been in the forefront of the minds of those people who have been limping by from one month to the next, and are still having to pay bills and using the furlough scheme to pay staff.”
How The Budget supports hospitality: Five key points
In his Budget statement to the House of Commons on Wednesday, Chancellor Rishi Sunak said the economy, which has lost 700,000 jobs since last March, would not return to pre-Covid levels until the middle of 2022.
Among the announcements he made of particular interest to the hospitality sector were:
* Business rates holiday: Rishi Sunak said: “Our business rates holiday will be extended through to the end of June. For the remaining nine months of the year, business rates will still be discounted by two thirds, up to a value of £2m for closed businesses, with a lower cap for those who have been able to stay open.”
* £5bn of new Restart Grants: Non-essential retail businesses will get grants of up to £6,000 per premises. Hospitality and leisure businesses will get grants of up to £18,000.
* Extension of VAT reduction: The Chancellor said the 5% reduced rate of VAT would be extended for six months to September 30, followed by interim rate of 12.5% for another six months. The standard rate will not return until April next year.
* Extension of furlough: The furlough scheme - which pays 80% of employees’ wages - is to be extended until the end of September, though firms will be expected to chip in. In July employers will be expected to contribute 10% of a furloughed employee’s wages for the hours they aren’t working, while in August and September that will rise to 20%.
* £150m to help pubs, shops and sports clubs: A £150m fund will be set up to allow communities to take over pubs, theatres, shops or sports clubs at risk of closure.