CHANCELLOR Rishi Sunak today announced a much-needed boost for tourism and hospitality businesses in the South West, as part of his Summer Economic Update to kick-start the economy post-coronavirus.

The measures will see VAT for hospitality, accommodation and attraction businesses cut from 20 per cent to five per cent for six months from July 15 until January 12.

The move is designed to support the sectors that have been particularly hard hit by the Covid-19 coronavirus crisis, helping businesses to recover and boosting the number of jobs across the country.

James Sullivan-Tailyour, owner of the White Swan Hotel in Bradford on Avon, welcomed the incentives, saying they might give people the confidence to start going out.

"This is really out of the box and I think it's amazing and really interesting.

"It's a great opportunity to help pubs and restaurants to get back on their feet."

Up to 29,815 businesses could stand to benefit from the measures in the South West, including 455 in the Chippenham Parliamentary constituency, 585 in Devizes, 565 in North Wiltshire and in 445 South West Wiltshire.

MPs across the South West have also urged local people to eat out to help out, following the announcement that the government will pay for up to 50 per cent of people’s meals out at restaurants, pubs and cafes on Mondays, Tuesdays and Wednesdays throughout August.

The Eat Out to Help Out scheme will entitle everyone to a discount of up to 50 per cent on their meal, up to a maximum of £10 per person.

Businesses can claim the money back from the government, which will be paid in five working days.

Up to 15,340 businesses in the South West could benefit from the move, including 215 in Chippenham, 205 in Devizes, 200 in North Wiltshire and 210 in South West Wiltshire.

But Phil Mills, head of food and drink at accountants and financial advisers Old Mill, which has an office in Melksham, said: “While any initiatives put in place to help the region’s struggling pubs and restaurants are certainly welcome, I think these two may have some issues.

“Pubs and restaurants are usually pretty busy in August and with most people likely to opt for a staycation this year, I am not sure pushing demand over the summer holidays is what’s needed.

“There is a danger that participating pubs and restaurants will see a huge spike in custom for a month which could mask the real state of the business, causing them to take back staff – encouraged by the £1,000 incentive – who they then cannot afford to keep once the ‘Eat out to help out discount' is finished.

“What the sector really needs is more sustained initiatives that drive demand, not just in August, but throughout the rest of the year, allowing businesses to find their feet without being lulled into a false sense of security by short term measures.

“What we don’t want to see is businesses taking on staff to cover a busy August, and then have to let them go when they realise that their model is not sustainable, causing further issues for an industry already struggling to know what the new normal looks like.”

But the Government said that, taken together, these measures will provide a timely and much-needed boost to the tourism and hospitality industries in the South West, forming a key part of the government’s plan for jobs – supporting people to find jobs, creating new jobs and protecting jobs in hard-hit sectors.

Matt Griffith, Director of Policy at Business West, said: “For someone who has only been Chancellor for five months, Rishi Sunak is proving a remarkable calm and capable operator. This is lucky, because never have these qualities been more important.

“This is a critical moment. The withdrawal of furlough payments, amidst deep economic uncertainty and the continuation of social distancing, is a major risk: the UK could see an unprecedented collapse in employment that would do long lasting damage to our economy.

“For this reason, Rishi Sunak’s overwhelming focus was on jobs – on their protection and creation.

“And it was an impressive array of measures, from a jobs retention bonus to a £2 billion kickstart fund for new jobs for young people, to a wider economic stimulus via stamp duty cuts and a five per cent VAT rate for leisure and hospitality businesses.

“He also pulled a rabbit out of the hat with a voucher to get people back eating at restaurants.

“This economic statement, however, remains a gamble. Are firms confident enough to retain and create enough jobs in the face of such uncertainty?

“Will the measures be enough to counterbalance the hit to income and capacity that social distancing has given to our hospitality and food and drink industries? Will we see a second spike and local lockdowns to blow events off course?

“The Chancellor has an Autumn budget as fall back in case this statement isn’t enough.

"But in the meantime, let’s take up his generous offer to help our economy recover – if the Chancellor is buying, it is up to us to help support getting our local economy back on track.”

Other initiatives include:

• Rewarding and incentivising employers who successfully bring furloughed staff back through a new Jobs Retention Bonus Scheme. To encourage employers to keep their employees on, the Government intents to introduce the Jobs Retention Bonus Scheme, a one-off payment of £1,000 to the business for every employee who was furloughed previously and who is successfully kept on continuously until January. Its message to business is: if you stand by your employee, we will stand by you.

• Helping businesses meet the costs of keeping their staff on their books throughout the coronavirus outbreak. The Coronavirus Job Retention Scheme allows firms to furlough workers, with the Government paying 80 per cent of employees’ salaries, up to £2,500 a month until the end July, at which point the scheme will continue until August but with employees asked to contribute towards some of the salary costs, alongside Government. The scheme has already supported 8.4 million jobs, at a value of £15 billion.

• Launching the Self-Employed Income Support Scheme, to ensure people who work for themselves are getting the support they need. The Government will pay self-employed people who have been adversely affected by coronavirus a grant worth 80 per cent of their average monthly profits over the last three years, up to £2,500 a month, for three months. A second grant is available covering March to August, available at 70 per cent of average monthly profits.

• Making grants available for the industries and small businesses which have been hardest hit by the coronavirus outbreak. The Government is providing grants of £10,000 or £25,000 to businesses in the retail, hospitality and leisure sectors and which occupy properties with a rateable value of less than £51,000.

• Offering a 12-month business rates holiday for sectors which are struggling with cashflow issues. All eligible businesses in the retail, hospitality and leisure sectors, as well as nurseries, estate agents and bingo halls, will pay no businesses rates from 12 months, from April 1 2020.

• Providing Bounce Back Loans to ensure businesses are able to get access to financial support as quickly as possible. Any smaller business experiencing financial difficulties because of coronavirus can apply for a loan of up to £50,000, which is 100 per cent guaranteed by Government for the first 12 months – during which time no repayments will need to be made. Loans reach bank accounts within days of an application being made. More than one million loans have now been approved, worth over £30 billion.

• Setting up the Coronavirus Business Interruption Loan Scheme to help companies that need access to cash. Any viable business with a turnover of up to £45 million can apply for a loan of up to £5 million, and the Government has banned lenders from requesting personal guarantees for loans under £250,000. A Coronavirus Large Business Interruption Loan Scheme is also available to provide loans of up to £25 million and £50 million for companies with a turnover above £45 million.