Sacha Lord has hit out at Chancellor Kwasi Kwarteng over the lack of support for hospitality businesses outlined in the latest mini-budget announcement. The Night Time Economy Advisor for Greater Manchester took to Twitter on Sunday afternoon (September 25) to warn the chancellor that hospitality businesses are 'already closing'.
In his mini-budget, Kwasi Kwarteng unveiled a return for tax-free shopping, freezing of beer, cider, wine and spirit duties, and confirmed energy support for firms. Business leaders were positive about these actions within a plan the new Government hopes will lead to steady 2.5 per cent economic growth.
However, there was criticism that more support was needed for parts of the economy heavily hit by the pandemic and likely to come under pressure from squeezed household budgets. Hospitality and retail leaders have said the Chancellor's plan did not address business rates or VAT needed to continue supporting business on the high street that are still recovering from the Covid-19 pandemic.
Sacha Lord, who also co-founded the Parklife festival in Manchester, previously warned that the budget announcement would mean 'last orders for thousands of hospitality businesses'. He added that the corporation tax cuts were 'completely useless' for businesses not turning a profit.
In his tweet on Sunday, he wrote: "Hospitality closures have started. Businesses ruined, jobs lost. You could have prevented this @KwasiKwarteng. Instead you helped your banker pals in the City of London. Unforgivable.
"We won't forget this. As Chancellor, you've lost support of the 5th biggest sector in the UK."
He went on to respond to replies to the tweet, writing: "You only pay Corporation Tax on profits, which hospitality on the whole isn't making right now. A reduction in Vat was needed, not a handout. 10 per cent of something is better than 20 per cent of nothing."
Following the mini-budget announcement on Friday, Sacha Lord was critical of the package, writing: “Speechless. No VAT or biz rate support for hospitality. Corporation tax cuts are completely useless if businesses aren’t turning a profit, or worse, closed. These announcements will now mean last orders for thousands of hospitality businesses meaning mass redundancies.”
The Treasury has said support is being provided through the energy bill relief scheme and business rates relief of up to 50 per cent remained available for hospitality businesses.
Kate Nicholls, chief executive officer of UKHospitality, said: “The Chancellor committed to making the UK a globally competitive tax regime, yet overlooked two obvious levers to achieve that, through lower VAT and business rates reliefs. Our VAT rate is the highest in Europe, which is starkly at odds with ambitions for global tax competitiveness and will hopefully be addressed in the autumn budget, if not before.
“While tax-free shopping for overseas customers is a welcome step to attract overseas tourists, a far more immediately impactful step would be to reduce VAT for our domestic customers. Our VAT rate is the highest among modern economies, so if we want a globally competitive market, we need lower VAT and an equitable alternative to business rates.”
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