By Nadeem Badshah
LEADING chefs and restaurant bosses have urged chancellor Rishi Sunak to provide further financial support to save the industry from the impact of the coronavirus pandemic.
They have welcomed Sunak’s package of measures, which includes slashing VAT from 20 per cent to five per cent for food and non-alcoholic drinks for six months, but they have also called for more long-term help.
In his measures announced last Wednesday (8), the chancellor also announced a Eat Out to Help Out scheme last week with diners able to claim a 50 per cent discount of up to £10 in August on a meal.
Spending on restaurants, travel and entertainment plummeted by around 80 per cent at its lowest point since lockdown was enforced in March.
The closure of eateries and some takeaways has put the future of thousands of south Asian businesses at risk. Indian Accent and Darjeeling Express, both in London, are among the restaurants that have closed permanently.
Pasha Khandaker, a senior member of the Bangladesh Caterers Association, told Eastern Eye: “I congratulate Rishi Sunak on the budget but there are many grey areas or blind spots. Five per cent VAT is not going to attract customers to restaurants, the Dine Out scheme is not going to provide much help.
“We need something for much longer, VAT for longer and for takeaways – if he doesn’t invest money we will suffer, and the Treasury will suffer.
“It’s not enough. We want a sector-based project and a tax, PAYE and rate holiday, then the hospitality industry will survive. “The furlough [scheme] is a good step, VAT is a good step, the Bounce Back Loan is a good step. [But] we need to bring the confidence back.”
There are around 12,000 south Asian eateries in the UK. Sunak said the Eat Out to Help Out scheme would support around 130,000 businesses and help protect the jobs of their 1.8 million employees.
The discount for diners can be used unlimited times and will be valid Monday to Wednesday on any eat-in meal, including on non-alcoholic drinks. Participating businesses will be fully reimbursed for the 50 per cent discount.
The temporary VAT cut to supplies of food and non-alcoholic drinks from restaurants, cafés and similar premises began on Wednesday (15) and will last until January 12, 2021.
Chancellor Sunak also announced a Job Retention Bonus, a one-off payment of £1,000 to employers for every furloughed worker who remains continuously employed through to the end of January 2021.
Cyrus Todiwala, who runs two branches of Mr Todiwala’s Kitchen and Café Spice Namaste in London, told Eastern Eye: “While the chancellor has done a lot for Britain as a whole, he can do more. We as businessmen always feel that way. The industry has been lobbying the chancellor’s office for several years about VAT even before Covid.
“Keep VAT on food in restaurants and hotels to 10 per cent constantly and see the rise in employment, places buzzing and the increase to the state’s revenue.
“So while five per cent is good, over six months will not do much, however if for hot food delivered is reduced to 10 per cent as a constant, this will give people a boost.”
Along with the pandemic, south Asian eateries have been struggling with rental rates quadrupling in areas, including Brick Lane, East London, and the shortage of chefs due to tougher immigration rules which make it harder to hire talent from abroad.
Anjula Devi, a chef and food author, said when evaluating the VAT reduction, it is important to remember that restaurants have been closed since late March “so have already endured significant financial hardship”.
She added: “The nature of the VAT cut is significant on both counts. The discount scheme in August is intriguing and much more so if it proves to be successful and is extended.
“Set against both of these government initiatives, it’s really important to consider that rent, especially rent liabilities during the restaurant closure period, could well prove too much for some.
“Although many restaurants will remain in a determined battle for survival, the government measures are definitely positive.
“The key questions on my mind are will the measures be enough financially and, considering a different perspective, can all restaurant customers and staff remain safe at all times?”
HM Revenue and Customs boss Jim Harra wrote to Sunak last week to express concerns about paying firms a £1,000 bonus to retain furloughed staff and questioned the value for money of the scheme offering 50 per cent off restaurant meals. The chancellor rejected his concerns, saying action was needed to save jobs.