Hospitality boss calls on Badenach for support amid power bill crisis | Business news
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Kemi Badenach, the business secretary, is facing calls from hospitality industry chiefs to extend new financial aid to businesses by changing the terms of emergency credit schemes set up during the pandemic.
In a letter seen by Sky News, Kate Nicholls, chief executive of UK Hospitality, called on Ms Badenoch to work with the British Business Bank (BBB) to extend repayment terms included in the coronavirus business interruption loan scheme (CBILS). .
Ms Nicholls said her members depended on such help at a time when many were locked into expensive multi-year energy contracts.
She cited research showing that almost a third of members of the UK hospitality industry are concerned about a collapse in the next year, with the vast majority attributing this concern to their energy accounts.
“The problem that complicates this is the lack of cash flow associated with the debts CORONAVIRUS INFECTION COVIDMs Nichols wrote.
“A significant number of businesses are still paying back loans and coronavirus business interruption loans (CBILs), where repayment interest rates have risen to around 8-10%.
“HMRC’s inflexibility in applying time-of-payment relief is also hurting the functioning of some businesses.”
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Ms Nicholls highlighted the fact that member banks are not allowed to extend the maturity of CBIL loans except in exceptional cases, but this means that a company has to declare itself “severely compromised”, which has a negative impact on its credit rating. rating.
The UKH chief called on the business secretary to work with the BBB to produce a revised set of conditions for the extension of CBILS loans “with a presumption in favor of extension for businesses adversely affected in the short term by the energy crisis”.
“It should also have no impact on the credit rating of the business as it would be considered a standard refinance,” Ms Nicholls said.
“Along with this advice HMRC should take a more relaxed approach to Time To Pay (TTP).
“We have evidence that fully viable businesses have been denied TTPs despite documentation of their cash flows and the short-term nature of their liquidity shortfalls.
Kate Nicholls is seen during an appearance on Sky News
“This is mainly caused by energy suppliers demanding extortionate deposits and others being slow to return deposits.”
UK Hospitality’s warning highlights the pressure many businesses are facing despite the recent fall in wholesale gas prices and a corresponding reduction in household electricity bills.
In recent weeks, Chancellor Jeremy Hunt has pushed to support mortgage customers through a new charter agreed with the banking industry.
“An additional measure to support business at this time would be to extend the guidance the Chancellor has given banks on non-arrears mortgages to business customers,” Ms Nicholls wrote.
“These issues are critical to the survival of thousands of businesses in the hospitality sector.”
