Mon. Nov 29th, 2021

“Businesses are facing a significant wall of escalating costs,” Kate Nicholls told ITV News London.

London companies hit by Covid restrictions welcomed the chancellor’s 50% reduction in business prices, but warned a sharp rise in other costs could threaten jobs.

Rishi Sunak revealed business interest rate cuts of around £ 7bn over the course of its autumn budget.

The series of changes for next year included the cancellation of the rate multiplier increase and a 50% reduction to next year’s rates for most retail, hospitality and leisure businesses.

But UK Hospitality chief Kate Nicholls said the action may not be enough to offset rising pressure elsewhere.

“Businesses are facing a significant wall of escalating costs,” Kate Nicholls told ITV News London.

“We are seeing cost price inflation through the supply chain running at around 13%.

“We are seeing a real shortage of labor, which is preventing many of the companies from functioning fully,” she added.

Kate Nicholls said it meant job losses and business failures were still likely in the current economic climate, exacerbated by a planned rise in VAT.

“The VAT rate was currently reduced for the hospitality sector to help it through the pandemic,” Ms Nicholls said.

“From 5%, it went up to 12.5% ​​in October, and price increases must have an impact on customers as a result.

“It should rise again in April and there will be an additional £ 3-4bn in tax spending for the sector to cope,” she added.

Chancellor Rishi Sunak is leaving Downing Street 11 before handing over his budget

The head of hospitality said it was important to keep VAT low in order to remain “price competitive” and increase tourism, which was “important to get the London economy back on track”.

Jace Tyrrell, CEO of the New West End Company, which represents firms across London’s West End, said: “It’s encouraging to see the Chancellor finally act on the need to reform the corporate tax system.

“Canceling the inflation-linked increase for the multiplier can ensure that interest rates do not rise this year, but they are still too high.

“Reducing the time between revaluations to three years is welcome, as is the short-term facilitation of investment in improvements and sustainability, but it is far from a basic review.

“This simply does not meet the government’s manifesto obligation to reduce the burden of business prices on business.”

For some West End companies, including Soho’s legendary The French House, the chancellor’s announcement came as a huge relief.

“It’s fabulous! The business rate will save me over £ 50,000 a year as we can invest in other things, staff and the rest of it – happy days!” said owner Lesley Lewis.

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