Hard-pressed bars, theatres and nightclubs will be hit with huge furlough and business rates bills as Rishi Sunak slashes vital Covid support from next month.
Hospitality businesses are still struggling with lockdown curbs after the government delayed ‘Freedom Day’ due to the spread of the Covid Delta variant last week.
But the Chancellor will press ahead with removing high street rates relief and emergency wage payments, leaving small businesses with an estimated £50m burden from July 1.
An analysis by the Labour Party says theatres and nightclubs will be hardest hit by the new demand for 34% of business rates.
The average theatre will have to pay £1,048, followed by £718 for the average night club, £598 for the average restaurant and £500.
Shadow Business Secretary Ed Miliband has also sounded the alarm over scores of job losses in the hospitality sector as the Treasury will force businesses to pay 10% of emergency wage costs from July 1.
Pubs and cafes, for example, with employees still on furlough face a choice between paying around £122.80 for a staff member whose job they want to protect, or making them redundant.
With many venues unable to open their doors, Labour is urging the government to change course by delaying both demands.
Miliband told the Mirror: “Businesses have done right by our country during this crisis and the government must do right by them. But Ministers have repeatedly failed to grasp the simple principle that public health restrictions must be matched by fair economic measures.
“A month’s delay may seem like a short time, but for businesses legally closed from trading or those hanging on by their fingertips from going under and relying on the summer season the delay is another blow. That businesses unable to reopen are being sent huge bills defies logic. Unless Ministers take action, we risk pushing more firms over the edge.”
A Treasury spokesperson said: “Unlike the Labour Party, we set out a Plan for Jobs over a year ago and that plan is working. We deliberately went long with our support to provide certainty to people and businesses over the summer.
“The furlough scheme is in place until September and is amongst the most generous schemes in the world – already providing £65 billion of support and protecting 11.5 million jobs. The government will continue pay 70% of workers’ wages over July, with businesses asked to cover just 10%.
“They can also continue to access additional support, including restart grants worth up to £18,000 per business, and business rates relief and a cut to VAT – both in place until March 2022.”