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VAT cut critical for survival by three-quarters of small hospitality firms

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IN A STARK warning to the Treasury, a sweeping survey conducted by the National Caterers Association (NCASS) has unveiled that a staggering 75% of independent hospitality businesses view a reduction in VAT as essential for their survival amidst the severe inflationary pressures besieging the sector.

In Pembrokeshire we have already seen the closure of some well known local businesses including The Welsh Bakery, Madison’s Restaurant and many more.

The survey, which gathered insights from both members and the broader independent hospitality community, paints a grim picture of the challenges faced by small cafés, restaurants, bars, hotels, and street food vendors. With a clarion call for immediate action, the results underscore the urgent need for measures to protect the livelihoods of thousands operating within this critical industry.

Discontent is rife among the respondents, with 78% expressing dissatisfaction with the level of support provided by the government. A further 80% reported that the Autumn Budget’s measures failed to offer any relief, highlighting a disconnect between policy and the practical needs of these businesses.

Alarmingly, 37% of those surveyed indicated that their operations might not be sustainable over the next year, citing a dramatic 30% decrease in gross profit. The survey also revealed unanimous concern over rising costs, including staff wages, energy bills, and rent, forcing businesses to adopt drastic measures such as reducing staff hours, increasing prices, and accruing debt to stay afloat.

One member’s testimony encapsulates the despair within the sector, questioning the viability of continuing their business under the current conditions, especially in light of what they perceive as governmental negligence.

The crisis not only threatens the existing fabric of the UK’s independent hospitality scene but also stifles the growth of emerging businesses, many of which have been instrumental in revitalizing high streets across the nation. Despite the government’s promotion of hospitality-led regeneration initiatives, the current economic environment jeopardizes the emergence of future success stories akin to established brands like Meat Liquor, Pizza Pilgrims, and Bao.

The situation is dire, with an estimated 10 businesses closing daily within the hospitality sector. The NCASS reports a doubling in the closure rate among its members in 2023, with new startups hitting a standstill.

Amid calls for intervention, the plight of these small and micro businesses underscores a broader issue: the need for a conducive operating environment that nurtures community, supports families, and fosters economic growth. The increase in VAT and corporation tax, coupled with the cost-of-living crisis, has left many businesses operating on razor-thin margins, if any.

Highlighting the perverse incentive created by the current VAT threshold, which has not been reviewed since 2016, the NCASS argues for a recalibration to account for inflation and ease the burden on businesses teetering on the brink of viability.

The plea for a fairer VAT rate is a testament to the sector’s resilience and innovation, especially in the wake of the COVID-19 pandemic. With the treasury benefiting from increased tax receipts due to inflationary pressures, there’s a compelling case for leveraging this fiscal space to support the independent hospitality sector, thereby safeguarding high streets and the very essence of local communities.

As the industry stands at a crossroads, the consensus is clear: a reduction in VAT could be the lifeline needed for these businesses to weather the storm and contribute to the UK’s economic and social fabric. The government’s response, or lack thereof, could very well determine the fate of countless independent hospitality ventures teetering on the edge of survival.

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Business

Johnston holiday lodges expected to be approved

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PLANS for 20 self-catering holiday lodges in the Pembrokeshire village of Johnston are expected to get the go-ahead next week.

An application before the May 21 meeting of Pembrokeshire County Council’s planning committee by Peter Rawsthorne seeks permission for the short-stay lodges and associated works on land behind The Larder, Vine Road.

The application, sited near a collection of single storey buildings associated with Silverdale lodge which are currently in use as temporary emergency accommodation, is recommended for delegated conditional approval.

A report for planners says: “The application seeks full planning permission for the siting of 20 short-term stay holiday lodges.  The lodges would be positioned on concrete bases either side of a central access road running through the length of the site.

“Comprising of either two or three bedrooms, each unit would have the benefit of an associated car parking space and raised veranda to provide access into the unit and an external amenity area.  The lodges will be finished with timber or timber effect cladding to the walls under a shallow dual pitched roof of metal sheeting with a UPVC framed fenestration and rainwater goods.”

It adds: “The proposal will generate some noise, odours and artificial light nuisance in comparison to a currently vacant site.

“Given the close proximity, at the southern end of the application site, to existing residential in Silverdale Close and Acorn Drive the Head of Housing and Public Protection has advised that a Noise Impact Assessment (NIA) should be required prior to the determination of the application to allow for the assessment of all noise emissions from the proposed development and for this to set out proposed measures of how to attenuate any noise nuisance.

“Consideration has been given to whether requiring such an assessment would be reasonable or necessary to make the development acceptable.

“It is acknowledged that the nature of the use of the site as proposed could generate some noise and disturbance, and that there is likely to be a heightened awareness to this for existing occupiers when the site is first occupied, compared to the current vacant use of the site or its previous use as an informal garden space for occupiers of the Silverdale lodges.

“However, the residential occupation of the space, albeit by short-term visitors who may have less regard for existing permanent residents, is a use typical of and expected in this service centre sized settlement and could be satisfactorily absorbed.

“Excessive noise and anti-social behaviour are matters which can also be dealt with by other legislative controls.”

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Tafarn Sinc community pub’s call to keep disabled access granted

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A PEMBROKESHIRE community pub, which earned the support of a Hollywood star, has been allowed to keep a disabled access walkway and restored platform used for performances by local choirs.

In a retrospective application submitted to Pembrokeshire Coast National Park, Cymdeithas Tafarn Sinc sought permission to retain works at the Tafarn Sinc community pub in Rosebush.

In its submission, the community group said: “An existing platform adjacent to the pub has been restored and slightly expanded; with a new access walkway installed.

“The walkway was added for Health and Safety reasons and allows both able bodied and disabled people to safely access the platform. The platform is used for a variety of activities, such as performances by local choirs.

“The platform was formerly railway platform on a small branch line, and has been restored to look as it did when it was operational.”

The works were undertaken in 2022, the application said.

Tafarn Sinc had been in danger of closing when the old landlord and landlady retired back in 2017 but a huge fund-raising effort that attracted worldwide interest – including support from Hollywood star Rhys Ifans – meant it is now owned and run by the local community.

Campaigners raised a staggering £325,000 in little more than three months to buy the pub and keep it open and at the heart of community life.

Other public figures like Huw Edwards, Jamie Owen, Dewi Pws, Dafydd Hywel and ‘Heno’ presenter Mari Grug gave their support, with £200 shares bought by people from all over the world.

An officer report for the scheme proposed said: “The pub itself is constructed from corrugated metal and has an historical, industrial appearance. Historically, Rosebush Railway Station was adjacent and to the west of the pub building, built as part of the same development in the latter 19th century.

“A section of the Maenclochog Railway and platform still exist and form part of the pub and village’s visitor attraction. An inaccessible platform mock-up of a family of passengers had existed prior to this current development.”

Recommending approval it said: “The scale of proposal is proportionate to the existing ‘railway’ features and will create little impact on the special qualities of the National Park.

“There is concern however that the proposal could create an amenity impact for which this proposal has not been assessed for. An appropriate condition restricting the use of the development to prevent harmful noise pollution is therefore included.”

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Business

Council set to lease Haverfordwest airport in bid for financial stability

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SENIOR Pembrokeshire councillors are next week being recommended to lease Haverfordwest airport as part of plans to make the council-run facility, which had a circa £119,000 deficit last  year, cost-neutral to the authority.

Last year, Pembrokeshire County Council’s Cabinet, members heard the financial position at the council-supported Haverfordwest/Withybush airport deteriorated in 2022/23, with an out-turn position for 2022/23 of £238,000.

In March of this year, Pembrokeshire County Council’s services overview and scrutiny committee backed a recommendation that a lease to an existing stakeholder / established aviation company was pursued, including a wider stakeholder consultation.

A report before members at that meeting said the £238,000 loss had been reduced to an expected £119,000 for 2023/24 “following an extensive review of the operations of the airport”.

The report listed reasons for the halving of this deficit, including: an increased profit margin on fuel £40,000; increased landing fees £7,000; reduction in staff training £8,000; reduction in equipment and equipment maintenance costs £10,000; and a reduction in one off costs of hedges and sewers £53,000.

Following the scrutiny meeting, a more detailed recommendation is to be presented to Cabinet on May 20, and, if approved, would be dealt with under the delegated authority of the Assistant Chief Executive, with relevant input from officers.

The report before Cabinet says, following discussions with existing stakeholders: “It seems likely that the council would be able to agree a lease of the airport to an experienced and well-established aviation company who is an existing stakeholder with a good track record.”

The lease would be for an initial 10-year term, with a requirement to obtain/keep a CAA [Civil Aviation Authority] Cat II licence and at a market rent.

It adds: “This option would make the airport cost-neutral to the council from the day the lease is signed whilst also ensuring that an operational airport remains for Pembrokeshire to benefit from.

“The council intends to exclude Hangar 5 [indoor trampolines] from any lease as it is not part of the operational area of the airport and doesn’t house an aviation-linked business. This enables the council to keep the rental income from this property.

“The council also intends to include an option to take back, at no cost, part of the airport that may have the potential to be developed as a solar farm or industrial units.  Any staff currently employed at the airport would transfer to any new tenant/operator.

“Any lease would have to allow the operator to run the airport on the commercial terms of their choosing to give a chance of long-term sustainability, so, the council will lose full control of how the airport operates.

“However, any lease will require that the airport be maintained to an acceptable standard and that a CAA Cat II licence is maintained. If these terms of the agreement are breached, then the facility will return to the council.”

The report finishes: “It should be of note that an alternative proposal has recently been put forward by another existing stakeholder who does not have aviation experience.

“The proposal is one of a land swap whereby the council would exchange the airport land for other land owned by the stakeholder concerned. If this option were to be taken, the council would relinquish all its interest and any element of control it has in the airport, and accordingly there is no guarantee that an operational airport would remain in the county.”

It is recommended the former proposal is adopted; that the airport is leased to an existing stakeholder and established aviation company.

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