Some of the concerns recently voiced by the island’s hospitality sector were discussed during Tuesday’s House of Keys sitting.

Around 100 owners and operators of hospitality businesses in the island recently called for immediate action from the government to help save the industry.

The Licensed Victualler’s Association (LVA) issued a strongly worded statement on April 19 calling for changes to be made to minimum wage legislation, VAT and taxes.

During Keys, questions were raised by honourable members regarding what the Department of Enterprise and Treasury could do to support the sector, with there being the suggestion of reducing the level of VAT for local businesses.

However, Treasury Minister Dr Alex Allinson explained that this is not a viable option. He said: ‘The VAT sharing agreement we have with the United Kingdom is crucially important to government finances, making up around 28% of our annual income.

‘VAT revenue from the hospitality sector is a large proportion of the total, and this revenue is used to fund general expenditure. Any reductions in the rate, whether temporary or permanent, needs to be offset from elsewhere through additional taxation or a reduction in services or expenditure.

‘There are various groups in the United Kingdom who have similarly been lobbying the UK Government for VAT rates in the hospitality sector to be reduced to 12.5%. Were that to happen in the UK, we would follow suit because of the VAT sharing agreement.’

Minister for Enterprise Tim Johnston also detailed how the island’s Business Agency is looking to develop a 10-year economic plan which will look to benefit the hospitality industry in the long term.

Talking about the plan, Mr Johnston said: ‘It will set out a framework of how best to support sectors within our local economy over the medium to long term, with the first draft of this strategy being published before the summer.

‘In terms of right now, the department does currently provide a number of avenues for the support of the retail and hospitality sectors. This includes a business improvement scheme, accessibility grants for access improvements to business premises, and incentives for certain roles to assist small businesses in relocating employees to the island.’

In the LVA’s letter published on April 19, it read: ‘We urge the Chief Minister, Treasury Minister, Enterprise Minister, and top civil servants in the island’s financial departments to listen attentively. It’s time for the government to address our island’s issues.

‘It’s imperative that the government heed the expertise of those within the industry. Instead of implementing ineffective schemes with exorbitant costs, they must address our genuine needs and those of our workforce.’

The Enterprise Minister acknowledged that there are concerns in the short term with regards to energy, licensing costs and skills training, but that his department will ‘continue to meet and discuss with the sectors’ about these concerns.