LETTER TO THE CHANCELLOR ON CORONAVIRUS

Dear Chancellor,

Brighton and Hove is home to a usually thriving and vibrant hospitality and events sector but, like many others in the industry, local businesses are being devastated by the impact of coronavirus. For example, earlier this week, one hotel, which employs 200+ local people and provides jobs for many more subcontracted to supply the business, told me they have never observed such a dramatic decline in business as they have seen in the last ten days. They estimate that if the situation continues, they will be in a negative cashflow situation next month. And they make very clear that they cannot run the business in this situation.

 

They are not alone and the situation is not just continuing, it is getting dramatically worse. Hotels are not the only ones badly affected in my constituency. Bars, restaurants, event organisers, pubs, attractions, caterers and many relatively invisible business-to-business businesses are all struggling. As one event organiser told me:

 

Cash flow is tight & our work is seasonal, as we rely on deposits from clients at this time of year to pay our staff, office rent, equipment maintenance etc. We want to act, work & support the community in any way we can but at the moment all our attention is focused on salvaging our businesses.

 

I am therefore calling on you to announce a special rescue package for this sector, in addition to the general measures already announced for businesses, to include but not limited to the following:

 

·         Clarifying the Prime Minister’s statement on social distancing measures made during the Covid-19 daily press conference on 16 March 2020 and issuing an order to close so that pubs, restaurants, hotels and guest houses, event planners, theatres and cinemas, other hospitality businesses affected can access insurance.

 

·         An urgent suspension of all business taxes, to support this sector and beyond.

 

·         Scrapping VAT on tourism

 

·         Allowing businesses to use the apprenticeship levy cost to contribute towards salary costs rather than just training, enabling them to divert all available funds to help pay employment costs.

 

·         A temporary employer national insurance contributions holiday

 

·         A temporary universal basic income for every UK resident, so that those working in the sector can reduce their hours as needed in the security of knowing they will have a financial safety net. 

·         Urgent provision of longer-term support to businesses, in collaboration with unions, to avoid lay-offs once the two-week Statutory Sick Pay support provided by Government ends. 

·         Deferring tax through HMRC’s time to pay scheme so there is a significant and immediate temporary boost to cashflow. The events sector has many self employed people working within it and they pay tax twice a year, 31st January and 31st July – a clearly communicated, widespread extension of taxes due until 31st January would allow the self-employed who see a sudden drop in income to be more confident spending money they were otherwise saving to pay tax

 

I would argue that rescuing this sector is an investment in the kind of future economy that our world requires – and that from a sustainability perspective should take priority over enabling the aviation sector to continue with business as usual after this crisis has ended. You have momentous decisions to make in the coming days and weeks and I would urge you to think very long term about the wellbeing of people and of our natural world. Mass air travel has no place in a resilient economic future. Your Government spending should be designed to repurpose that sector of the economy, protecting jobs by redeploying them as we fight what the Prime Minister has called a war – and strengthening the local tourism and hospitality sectors that we will need going forward. 

 

I hope you will give these issues your urgent consideration – businesses have literally days in some instance before they make incredibly difficult choices and all need swift decisive interventions from your Government.

 

Best wishes, Caroline

 

 

 

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