Trade reacts to new UK prime minister
As the UK learns that Liz Truss will be the next prime minister, trade bodies are calling for ‘urgent intervention’ to help businesses as costs soar.
UK foreign secretary Liz Truss defeated ex-chancellor Rishi Sunak in the Conservative leadership contest today (5 September).
Truss took 57% of the votes cast, and will commence leadership tomorrow (6 September).
Truss is under pressure to announce a plan to tackle soaring energy costs across the UK.
Last week, UK Hospitality called on the government to announce ‘urgent help’ after Ofgem raised the energy price cap the week before.
The new price cap – the maximum amount an energy provider can charge for default tariffs – will come into force on 1 October.
It means a typical household in the UK will face energy bills of around £3,500 (US$4,100) annually.
The price cap does not apply to businesses, but is having ‘a knock-on effect’, the trade bodies warned.
UK Hospitality’s CEO, Kate Nicholls, commented: “Congratulations to Liz Truss on her election as the new leader of the Conservative Party and our prime minister. We very much look forward to working closely with her and the new Cabinet in the coming weeks, as we strive to save the hospitality industry, which is experiencing crushing cost rises.
“The new government must act quickly and decisively to address the soaring energy bills that are facing consumers and businesses.
“With the right package of support – including a reduction in the headline rate of VAT for the sector to 12.5%, a business rates holiday, the deferral of all environmental levies, the reinstatement of a HMRC Time to Pay scheme and the reintroduction of a trade credit insurance scheme for energy – the sector will be well placed to aid growth through generating jobs and local investment.
“Pre-pandemic, our industry spent £10 billion (US$11.5bn) a year in high-street regeneration and employed 3.2 million people, but with energy bills for hospitality businesses rising 300% on average – and as high as 750% in some cases – we desperately need a package of support put in place if we are to be able to play our part in the UK’s economic recovery and growth.”
The Scotch Whisky Association (SWA) has also shared its reaction to the news.
Mark Kent, chief executive of the trade organisation, said: “Congratulations to Liz Truss on becoming the next prime minister. She takes office at a critical time, with the cost-of-living crisis at the forefront of minds.
“Economic growth has been a priority for Liz Truss during the campaign, and the Scotch whisky industry is an example of how home-grown sectors can drive growth by attracting investment, creating jobs and increasing government revenue.
“Ahead of the autumn budget, it is vital that the UK government abandons the planned retail price index (RPI) increase on spirits duty. An RPI increase – in the region of 12% – would compound the cost of business pressures companies are facing, with already significant supply chain inflation and volatility, add at least 95p (US$1.09) of duty alone onto every bottle of Scotch whisky, and further fuel inflation.
“Previous duty freezes have been a clear sign of support for the Scotch whisky industry, and for Scotland, and increased revenue to the Treasury from spirit receipts by 30% over the past five budget duty freezes.
“In addition, delivering on an ambitious UK-India free trade agreement, which reduces the current 150% tariff on Scotch whisky, would create £1bn of additional exports over the next five years and create 1,300 UK jobs.
“We look forward to working with the new prime minister and her team to deliver for Scotch whisky at home and overseas.”
The Night Time Industries Association also stepped in to comment.
CEO Michael Kill said: “We would like to congratulate Liz Truss on becoming the new prime minister, and look forward to continuing the relationship with the government under the new administration.
“It would be hard to disguise the frustration and anxiety experienced across the industry, as we have had to patiently watch the leadership campaigns play out over the last four weeks.
Colin Neill, chief executive of trade body Hospitality Ulster, said: “It is too early to tell what impact the new PM will make on the sector, but it is clear that Northern Ireland in general needs to be a priority for her and her new cabinet.
“We are in the middle of a unique storm here in Northern Ireland, and without a fully functioning assembly executive decisions are being held back.
“We need to see urgent interventions to address the cost of doing business crisis through taxation on energy, VAT and rates so that are not held up due to no devolved government.”