26 May 2022

Opinion from Adrian Leopard & Co

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Chancellor offers a lot of help to hospitality – but only if you are likely to survive anyway
Adrian Leopard 274

Chancellor offers a lot of help to hospitality – but only if you are likely to survive anyway

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This was a budget like you have never heard with innovation – of that there is no doubt!

Today’s budget has been the most extraordinary of my professional career and that has been going on for a few years!

But we live in extraordinary times and the last time we faced the sort of inordinate difficulties which we face today was probably the second world war, and that was for very different reasons.

So the furlough is continuing, hospitality in particular is getting additional grants, no increase in alcohol duty, VAT 5% rate extended although the hoped for “change for life” looks unlikely now dates have been given for graduated increases. We always said that however much assistance is given to bring the country through the present economical difficulties, it will be the country that will have to find the money to pay it all off in the end.

What is the message for businesses which are bust or on the brink or indeed uncertain as to which way this is going to go for them? Sadly, this is a survivor’s budget, not a lame duck’s budget. The chancellor said last year that he could not save everyone and it looks like his efforts have been targeted towards those who are more likely to survive rather than those who will not. Grants of £18000 are not going to really change a business from collapse to survival especially as difficulties continue to run on.

There are many green shoots in the hospitality field; great hopes exist for a significant improvement in staycation, certainly for 2021 and probably 2022. It will be more difficult after that as foreign travel may have started to get back on its feet by then. So if you are wanting to “get back up on your feet”, a grant of £18000 may come in quite handy – help you get your stock levels back to normal, pay off some of that pesky rent and reorganise your staffing but your accumulated debts since you had to close are unfortunately not going to go away. The truth is that you will have to bear the burden of the pandemic for some while to come and so savings in tax rates may not actually even be relevant if you have losses to cover first.

Then there are those grants to send people off on courses – help to grow and help to grow digital. They sound like a really good idea and if you have the money, probably excellent value but you have got to be there with your business moving forward. Again this sounds like a good facility for the survivor.

We shall need to see how additional information unfolds over the next day or so and perhaps it will become clearer how future financial strategy can be arranged to bring about business survival. Without a doubt this is a really pivotal time for businesses on the cusp – you need to be very careful about what you decide to do.

Adrian Leopard 03-03-21

Photo Alvaro Serrano

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