I know that many hospitality businesses in South West Bedfordshire face serious challenges as a result of the COVID-19 outbreak and I sympathise with any employee who may be facing redundancy during this difficult time.
Recent developments have put pressure on businesses across the country. That is why I welcome that businesses in the hospitality and leisure sectors in England were eligible for one-off grants of up to £6,000. Further, more than £100 million discretionary funding for local authorities to support other businesses. The Government is also covering the cost of Statutory Sick Pay for absences due to COVID for small and medium-sized employers across the UK.
Businesses can continue to benefit from financial support through the Recovery Loan Scheme which enables eligible businesses to apply for loans between £25,000 and £10 million with an 80 per cent Government guarantee. Once received, the finance can be used for any legitimate business purpose, including growth and investment. I was encouraged that the Chancellor extended this scheme in the Autumn Budget and Spending Review 2021 until 30 June 2022. The scheme is now only open to small and medium sized enterprises, with the maximum amount of finance available set at £2 million per business and the guarantee coverage that the Government can provide to lenders has now been reduced to 70 per cent.
The Coronavirus Job Retention Scheme protected 1.4 million hospitality jobs and I welcomed the several extensions to the scheme, including the final extension to the end of September, which achieved the right balance between supporting the economy as it opened up, and continuing to provide support and protect incomes.
Hospitality businesses have also benefited from a combination of grants, funds, and a business rates holiday. In addition, the Chancellor listened to the calls from the hospitality sector to keep the temporary reduction in VAT (20 per cent pre-pandemic). While it remained at 5 per cent until 30 September, it has now changed to 12.5 per cent and will keep at this reduced rate for six months until 31 March 2022.
The Government’s Hospitality Strategy will enable the sector to build back better from the pandemic. The Strategy focuses on reopening, recovery and resilience, including further support for businesses reopening, with an additional £5 billion worth of grants. Ministers will work with the Government-owned British Business Bank and its delivery partners to support access to finance. I also welcome that, following a review, the Government will reduce the burden of business rates in England by over £7 billion over the next five years, and make the system fairer, more responsive and more supportive of investment. Up to 400,000 retail, hospitality and leisure properties will be eligible for a new, temporary £1.7 billion of business rates relief next year. This will provide support until the next revaluation, helping the businesses that make UK high streets and town centres successful evolve and adapt to changing consumer demands.
I am confident that this Strategy, alongside the Government’s High Streets Strategy and its Tourism Recovery Plan, will play a key role in levelling up every part of the UK.
I appreciate that some hospitality businesses are struggling to fill vacancies at the moment, not necessarily due to travel restrictions reasons. I am encouraged that the Department for Work and Pensions (DWP) is working closely with UK Hospitality, the UK's hospitality trade association, and the British Beer and Pub Association to promote opportunities in the hospitality sector to DWP customers.
I welcome that the legal requirement to self-isolate following a positive test has now been removed. The Government is continuing to advise those who test positive to stay at home and they may choose to take a lateral flow test after five days. It should be noted however that from 1 April, the Government will no longer provide free lateral flow tests. I welcome that as we start to live with COVID, this will reduce staff shortages in businesses and help them keep running.
I am encouraged that the Chancellor has confirmed that the business rates relief that enabled businesses to pay no business rates for the 2020-1 financial year was extended in the March 2021 Budget. As such the Government continued to provide eligible retail, hospitality and leisure properties in England with 100 per cent business rates relief from 1 April 2021 to 30 June 2021. From 1 July, there is 66 per cent business rates relief for the period from 1 July 2021 to 31 March 2022, capped at £2 million per business for properties that were required to be closed on 5 January 2021, or £105,000 per business for other eligible properties.
This relief applies to over 350,000 properties and was worth almost £12 billion in 2020-21. Nurseries and estate agents can also benefit. The Government has also provided local authorities with further support for businesses in their area and is freezing the business rates multiplier for 2021-22, saving businesses an estimated £600 million over five years.
I am delighted that, following a review, the Government is reducing the burden of business rates in England by over £7 billion over the next five years, and make the system fairer, more responsive and more supportive of investment. Up to 400,000 retail, hospitality and leisure properties, which is over 90 per cent of these businesses, will receive at least 50 per cent off their business rates bills in 2022-23 as they will be eligible for a new, temporary £1.7 billion of business rates relief in the next financial year. This will provide support until the next revaluation, helping the businesses that make UK high streets and town centres successful evolve and adapt to changing consumer demands. Apart from reliefs in response to COVID-19, this is the biggest single-year cut to business rates in 30 years.
The Government is also freezing the business rates multiplier in 2022-23, a tax cut worth £4.6 billion over the next five years. This will support all ratepayers, large and small, meaning bills are 3 per cent lower than without the freeze.
I also welcome that the recently announced one-off grants of £6,000 will aid with challenges which have occurred as a result of the pandemic, in particular from the Omicron variant. However, venues should comply with the scheme's eligibility criteria. For the purposes of this grant, hospitality venues include businesses whose main function is to provide a venue for the consumption and sale of food and drink. This includes: businesses offering in-person food and drink services to the general public and businesses that provide food and/or drink to be consumed on the premises, including outdoors. While government guidance does not specifically mention hospitality venues within sports grounds, if your business meets the criteria, it will be eligible to receive funding.
The Government has set out that this grant should exclude food kiosks and businesses which generate 50 per cent or more of their income from takeaway services. However, the proposed exclusions are not intended to be an exhaustive list and it is for local authorities to make final decisions on specific cases. Therefore, if your business does not meet the suggested criteria, please contact your local authority to pursue this funding. Further, more than £100 million discretionary funding for local authorities to support other businesses. For more information about eligibility and the scheme more generally, please see:
More broadly, I welcome that businesses can still access the Recovery Loan Scheme which enables eligible small and medium size businesses to apply for loans between £25,000 and £10 million with an 80 per cent Government guarantee. Further, I am encouraged that the Chancellor has confirmed that the business rates relief was extended in the March 2021 Budget. Finally, I am glad that the temporary reduction in VAT remains, now at 12.5 per cent, and it will be kept at this reduced rate for six months until 31 March 2022.
However, I am not aware of any plans to permanently reduce the rate of VAT on all food and drink sold in pubs. I have spoken to colleagues at the Treasury who have made it clear that the temporary reduction to VAT was intended as a measure to support the industry during the coronavirus pandemic. To extend this reduction indefinitely would limit funding long-term for the vital public services which have served us so well in this time of national crisis.
I am encouraged that the Government has extended the business eviction ban until 25 March 2022 to support businesses worst affected by the pandemic, such as pubs, bars and restaurants, rebuild over the winter period.
Employers still have a legal duty to manage and mitigate risks affecting their business. Employers must carry out a health and safety risk assessment, including the risk of COVID-19, and take reasonable steps to mitigate the risks identified. While it is no longer a legal requirement to display the NHS QR code or to collect customer details, businesses are encouraged to do so to assist NHS Test and Trace. As always, businesses should try to ensure their premises are well ventilated and cleaned regularly.