Pubs and bars cheer end of Plan B but warn VAT could still sink firms

RETAIL and hospitality leaders were today pinning their hopes on the return of office workers to boost trade after the Government scrappedwork from home guidance.

Chief executives and industry groups cheered the end of Plan B restrictions but many said businesses were still on a knife edge.

Clive Watson, CEO of City Pub Group, told the Standard: “To get Britain back to work, so to speak, is absolutely vital for hospitality. A lot of businesses, including our own, do rely on people being back at their desks and coming into London. That’s a really key driver going forward.”

There were signs of hope today as US investment bank Citi, which has thousands of UK employees, asked staff to begin coming back to the office for at least three days a week. Flexible office space provider-Workspace said it signed 117 new lettings per month in three months to Christmas as occupancy returns to 86.6%.

Rising hopes came as trading figures underlined the setback suffered by hospitality after Plan B restrictions were introduced.

City Pub Group, which runs watering holes across London and the South, said work from home orders saw December sales retreat to 85% of pre-pandemic levels.

Revolution Bars said Plan B restrictions meant sales over Christmas were down 23% compared with 2019 levels. CEO Rob Pitcher attacked the Government’s “confusing” messaging but said the end of restrictions was “very welcome for our business and will actively help rebuild consumer confidence.”

He said: “It is imperative going forward there are no further restrictions as we all learn to live alongside Covid 19.”

For many businesses, a febrile recovery seen in the second half of last year was derailed by the Omicron wave, leaving them in a weak position. UKHospitality CEO Kate Nicholls said: “The critical Christmas trade was laid to waste for the second year running.”

Companies are now facing surging costs due to rising energy bills, wages, and raw material costs, making a quick revival in business crucial.

Both Watson and Pitcher urged the Government to scrap planned tax rises that come into force in April, including a VAT rise from 12.5% to 20%.

Watson said: “There’s a lot of deferred rents out there, a lot of operators really begged, borrowed and almost stolen from every source to stay in the game. I just think loading on the sector on extra tax in March is definitely the wrong thing to do. It’s counterproductive because operators will fall over.”

Watson said inflation in the pub sector was running at between 7% and 9%. He admitted prices were still likely to rise. A pint could increase by 40p — higher than his estimate of 30p last October — and a burger could rise by £1.50.