HOSPITALITY and tourism businesses were stunned by the Chancellor’s announcement, writes Nick Mosley.

The ground-breaking measures include an unprecedented six-month VAT cut for tourism and hospitality and discounts on dining out throughout the usually peak month of August. As one of the most stressed sectors of the economy and one of the UK’s largest employers hospitality and wider tourism has been particularly hit by the lockdown.

Carla ter Maat of Drakes hotel and restaurant in Marine Parade, Brighton, said it was a hugely positive step. “These are welcome measures which we feel will provide the incentive for the public to come out and enjoy a sit down meal together but also reduce the VAT sting for the coming six months,” she said.

Jeremy Ashpool, of Jeremy’s Restaurant in Haywards Heath, said: “Wow, it shows what a crucial sector we are. Unimaginable that we should see this level of support but most welcome and it alleviates the worries we have ahead of pulling the team back in on August 1. The early week voucher incentive is pretty smart too. This is a real shot in the arm.”

The VAT reduction will be a huge and immediate boost. UK tourism and hospitality has campaigned for years to see a lowering of sales tax, as already enjoyed by many of European neighbours.

“For us at Boho Gelato, the VAT cut in particular is very welcome,” said Brighton ice cream maker Seb Cole. “Being a seasonal business, and due to the timing of the pandemic, we have lost such a large chunk of this year’s trade. For us the clock is ticking before we are plunged back into the off-season, so knowing there are now incentives to get people back out and spending again is a great relief.”

Brighton Pavilion MP Caroline Lucas has long been a supporter of the Cut Tourism VAT campaign led by concerned parliamentarians and the national Tourism Alliance.

She said: “I have been campaigning for a cut in VAT for years... most recently I asked ministers in mid-June to cut the rate to five per cent. I’m glad the Chancellor has listened and done exactly that but now he needs to make it permanent. A lower rate of VAT could be a lifeline for restaurants, hotels and other businesses in Brighton and Hove. Tourism and hospitality is critical to Brighton and Hove’s economy, accounting for about 21,000 jobs in the city, worth nearly £900 million to the local economy. This industry will not fully recover by itself. The cut in VAT is a good place to start.”

There is some caution among restaurant owners about the effectiveness of the “Eat Out To Help Out” voucher scheme that will provide a 50 per cent reduction for sit-down meals in restaurants and pubs up to the value of £10 per person, valid Monday to Wednesday throughout August. It has always been a challenge to get people in on the quieter days. Many venues close on Mondays and Tuesdays, reflecting lack of demand.

But Michael Bremner of 64 Degrees in Meeting House Lane and Murmur in the King’s Road Arches, is confident that the initiative is a step in the right direction.

He said: “Hopefully it will encourage our customers who are still worried about being in a restaurant environment. We have worked hard and reduced covers drastically to make our restaurants safe but we feel the majority of customers are still nervous about going out.”