Restaurant bosses call for VAT cut as dining out sector braces for difficult return to business
Restaurant industry bosses have today urged Boris Johnson to take drastic action, including slashing VAT on the food they serve, to help the struggling sector survive the effects of coronavirus.
In a letter signed by the bosses of 90 major chains, Deliveroo founder Will Shu said that the government should also extend its job retention scheme for the industry to protect restaurants up and down the country.
The scheme has seen the government cover the wages of furloughed workers for companies unable to operate because of the coronavirus lockdown.
The chief executives of Pizza Hut, Pret A Manger, and Wagamama all signed the letter, which warns: “For the UK restaurant sector, this crisis is far from over and the potential consequences are deeply concerning.
“A huge number of restaurants across the country are facing the prospect of bankruptcy,” it reads.
Julian Metcalfe, founder of high street regulars Itsu and Pret A Manger, told City PM: “At Itsu we took the heartbreaking decision to close all our restaurants except to provide free food to NHS heroes.
“It has been a challenging time for our industry, which is why we are pleased to back this package of policy measures from Deliveroo.
“We believe the recommendations are vital to allow restaurants to cope with the pressures they are experiencing due to Covid-19.
“Our hope is that the government accepts these recommendations and we can get back to doing what we all love best, as quickly and safely as possible.”
Bosses have asked for the government to also extend its moratorium on evictions, so that restaurant tenants face less pressure on rents.
All of the measures called for in the letter are proposed to remain in place for as long as social distancing measures are necessary.
Kate Nicholls, chief executive of trade body UK Hospitality, said: “As these proposals from Deliveroo and their partner restaurants show, restaurants need urgent support from the government so that they can help rebuild economies and give people some much-needed enjoyment.
“Without it, some will close permanently and people’s jobs will be lost.”
The six measures proposed in the letter are:
- Prevent evictions by commercial landlords and provide mortgage holidays
- Offer grants to restaurants to help them pay to adapt to social distancing rule
- Temporarily reduce VAT on restaurant food
- Subsidise wages through the job retention scheme
- Launch a marketing campaign to reassure the public that restaurant food is safe during the pandemic
- Ease regulations including those on alcohol, takeaway services, and outdoor space
Deliveroo boss Chu told City PM:
“As the founder of a food delivery firm, working with 30,000 restaurants across the UK, I am passionate about supporting the industry.
Nothing is more important to me than ensuring that Deliveroo plays our small part to help restaurants reopen their doors and serve their customers once again.
That is why we have set out six policy recommendations to the Prime Minister, which I hope are adopted as quickly as possible.
The prospect of restaurants remaining closed is heartbreaking and I urge the government to do all it can in the weeks and months ahead to show its full support for this amazing industry.”