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Morning Briefing for pub, restaurant and food wervice operators

Wed 9th Dec 2020 - Legal Briefing

Hospitality’s Christmas wish-list by Christopher Grunert

The hospitality industry and those working in the trade have endured several heavy setbacks this year. The titanic efforts made by operators across the country to clear every hurdle the government has put before them has been impressive and should be reflected on with pride. However, the high level of responsibility put on the trade is undeniable. Equally undeniable are the blows the industry is taking on an almost weekly basis, which have been faced with stoicism and adaptability.

Government ministers, including Boris Johnson, have acknowledged the disproportionate pain endured by the sector in their public statements, although the words now feel somewhat hollow when considering the “support” being offered to hospitality businesses this winter.

Nevertheless, it is that time of the year when the Christmas songs emerge from hibernation to signal the start of our long-awaited festive celebrations. My wife’s absolute favourite is titled I Want A Hippopotamus For Christmas. As a firm believer that a funny joke never gets old, I make the same observation each year. I point out how a hippopotamus would be a dreadful and frankly, quite a dangerous present to receive on Christmas morning. Where would you keep it for a start? She rolls her eyes and does not laugh.

The industry undoubtedly deserves some nice presents this year. I have some suggestions that hospitality may be grateful to receive from the government after such a difficult period:

Pavement licence reform

The sector has faced a deluge of new laws arising from the pandemic. In late July, the government approved the Business and Planning Act 2020 (also known as the Pavement Trading Act). This created a streamlined and expedited process when applying for pavement licences with council fees capped at £100. Many local authorities embraced the deregulation and waived fees altogether. 

The act also gave licensed businesses the right to sell alcohol in these new areas, allowing them to continue a level of service during restrictions. The need for planning permission was waived and decisions were delivered quickly. Despite the successes, these relaxations are due to expire in September 2021.

Although not perfect (the system requires a suitable appeal mechanism), the legislation has shown these decisions can be streamlined effectively without impinging on other highway users. Establishing this as a permanent system would be a nice stocking filler.

Some authorities are already embracing this forward thinking, for example, Westminster recently announced its “alfresco” scheme would be extended by a further six months.

Council leader Rachael Robathan said: “We have 3,700 restaurants, pubs and bars in central London and they help to support around 80,000 jobs. Hospitality is a big employer for us and while the sector faces another tough few months under tier two restrictions, at least we can support those venues that can offer outside space.”

Cumulative impact policies and late-night levies

These policies were originally introduced to restrict an expanding licensed sector, specifically regarding night-time economy businesses and their perceived associated consequences. The consensus is that the sector is in a period of contraction due to the closures during the pandemic, sadly many of them will not reopen. Cumulative impact policies (CIPs), which now must be subject to tri-annual review, should all be reviewed now in light of the current crisis. 

We continue to see authorities dogmatically raising CIPs even when operators are simply trying to make allowances for social distancing in their establishments. The temptation should be removed or tempered by the licensing authorities to allow this area of the sector to support itself. 

For the same reasons late-night levy schemes should be reviewed. Many of the existing schemes have been much maligned and placing additional costs upon business, especially at this time, is surely counterproductive? Perhaps the cancellation of next year’s fees and/or a refund is in order?

An extension to the VAT cut

Between 15 July 2020 and 31 March 2021, the VAT rate for supplying food and non-alcoholic beverages has been cut from 20% to 5%. This is an extension to the original scheme that was due to expire on 12 January. With the rollout of the vaccine now under way, we hope that life will begin to return to normal in 2021. However, during the spring, social distancing and tier restrictions are likely to remain along with an amount of uncertainty surrounding the future. A further extension to the scheme to perhaps September 2021 and to include alcoholic drinks in the scheme would be a helpful way to assist trade after such a detrimental year for hospitality.

Eat Out To Help Out 2.0

Other imaginative schemes such as Eat Out To Help Out has displayed how the government can incentivise the public to support local business and provide substantial support indirectly to the industry. A similar strategy for Easter or, potentially, August 2021 would support food businesses and their paths to recovery. 

We at John Gaunt & Partners wish you all a pleasant and peaceful festive period and look forward to 2021 with renewed optimism. 
Christopher Grunert is a partner at John Gaunt & Partners
John Gaunt & Partners is a Propel BeatTheVirus campaign member

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