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Opinion: Liz Truss must do more to help hospitality businesses

“The Prime Minister must act decisively to provide urgent support for hospitality businesses who face crippling energy prices."

“Her biggest priority should be to expand the planned cap on energy prices to include businesses, and cut VAT on energy bills for small and medium businesses from 20 per cent to 5 per cent, bringing it in line with the consumers.


“This will provide businesses with far greater ‘buying power’ to negotiate long-term contracts with energy suppliers and come through the current crisis in one piece.


“Businesses would also welcome a freeze or overhaul of business rates to help them better manage their medium-term costs and gain access to crucial government-backed credit, particularly as interest rates for mainstream capital remain at high levels and many businesses in the hospitality sector are sorely underfunded.


“The prime minister must provide equally strong support for consumers to ensure there is more money in people’s pockets.


“While the planned reversal of this year’s 1.25 per cent rise in National Insurance is welcome, the government should go further and consider increasing personal allowances to help people retain more of their income.


“This will create more disposable income and possibly mitigate wage inflation which will in turn impact positively on businesses.


“Any measure which further dampens consumer demand will be a disaster for businesses just recovering from two years of Covid restrictions.


“Any procrastination on boosting consumer spending power may mean that businesses may not survive long enough to benefit any measure taken once the books have been balanced.”


About the Author: Rajeev Shaunak is a partner at accountancy firm MHA.


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