The Treasury is more likely to extend the VAT cut in April than introduce a new Eat Out to Help Out scheme, Kate Nicholls has suggested.

The UK Hospitality CEO was responding to suggestions by Chancellor Rishi Sunak that he would look at new ways of boosting consumer spending in the new year.

Speaking on MCA’s The Conversation, she said there was caution in the Treasury due to the uncertainty of the length of the crisis and the ensuing economic damage, and that fiscal stimulus measures would be tailored to the consumer mood at the time.

But she said reverting VAT for tourism and hospitality back to its usual levels on 1 April would be nonsensical for an industry embarking recovery.

Business rates reform could also be on the cards sooner than scheduled, with a growing acknowledgement within the Treasury of the scale of the issue for operators, she said.

Nicholls said: “I think there’s clearly a reticence in the Treasury to be opening up the coffers too much and needing to be cautious. The government has already had its fingers burned, reopening the economy, thinking the big spend was over, and then having to be more generous because we’ve gone back into lockdown.

“My gut feeling is that is that they are more likely to explore and continue the discussions around those schemes that we’ve got already, VAT in particular.

“The VAT cut runs out on 1 April, just before the Easter weekend, and it would seem highly illogical when you are forecasting that’s when you’re about to start recovery, that you would require a sector to put its prices up by 15% ahead of one of the busiest trading weekends of the year, if we are allowed to be open

“I think the VAT policy is under consideration, and there’s a lot of support from the devolved administrations for that to be continued too.

“There’s also a recognition within the Treasury that you need to look at business rates again and this root and branch reform as well as what happens next year.”