The hospitality and licensed on trade sector has largely welcomed the enhanced support package for businesses impacted by tier two restrictions across the UK announced today.
Industry observers said the new package, which includes cash grants and an enhanced Job Support Scheme, addresses some of the concerns it had been highlighting to Treasury, and state that the measures will help thousands of pubs who have seen their businesses greatly hampered by tier two restrictions, but until now were not receiving any support.
It said though that more support was still needed for brewers and those in the supply chain that serve pubs.
Commenting on the announcement, UKHospitality Chief Executive Kate Nicholls said: “This is a hugely generous package of support and very welcome news just when we needed it.
“The changes to the Job Support Scheme will help to safeguard hundreds of thousands of jobs and the grant support will provide a crucial lifeline for businesses struggling with low footfall and ongoing costs. It is excellent that the grant has been backdated to the date when the restrictions began to bite.
“This gives businesses a much-enhanced chances of being able to overcome the challenges and survive into 2021, to sustain businesses so they can begin to recover next year and play a vital role in helping boost the economy.
“It is encouraging to see the Government listening to and understanding the plight of hospitality, which is dire. We are pleased to see that the measures extend to hotels and B&Bs, too.
“It is important now that grants are processed as quickly as possible as businesses are on the brink after weeks of curfew and severe restrictions.
“There is still a long way to go and we will be in close contact with the Government to make sure that our members, and the whole of hospitality, gets the support it needs and deserves. This is a significant step forward for us, though, and a hugely valuable lifeline for businesses to stay afloat and keep as many staff as possible in their jobs.”
Emma McClarkin, Chief Executive of the British Beer & Pub Association, said: “This necessary and welcome support package will help thousands of pubs with tier two restrictions who otherwise faced devastation to their businesses.
“The impact of restrictions has been immediate and deep on our sector, requiring an extensive response from Government. The measures announced today recognise this and that the tier two restrictions make most pubs and hospitality businesses completely unviable.
“Having called for more support for businesses in our sector struggling under tier two restrictions, we warmly welcome these measures from the Chancellor today. They will help thousands of pubs and support thousands of jobs that otherwise were at real risk of being lost for good.
“We welcome the enhanced Job Support Scheme package for businesses, which we hope will protect more livelihoods in our sector. People are at the heart of pubs and have been our priority throughout this crisis.
“Additional cash grants for businesses under tier two restrictions also provide a crucial lifeline to our pubs, which we welcome. We look forward to seeing the detail on the grant delivery and hope these will remain under review in terms of covering actual fixed costs for businesses forced to close in tier three.
“It is imperative these grants are made exempt from EU State Aid restrictions to ensure they reach all the businesses that need protecting. If they are not made exempt, then they simply won’t reach the businesses that need them. They must also be delivered quickly to ensure pubs do not permanently close due to lack of cash flow caused by not receiving the grants in time to save them.
“The beer and pub sector has been under severe pressure since the beginning of the crisis. 90% of pubs are currently unable to make any profit. Our brewers are forecasting sales through pubs to be 50% down this year. Make no mistake more will need to be done to support Britain’s brewers and those in the pub supply chain who currently do not benefit from grants, as well as regular reviewal of the restrictions – including the 10pm curfew – to stimulate public confidence and increase trade. This will require further stimulus measures including Business Rates, VAT and Beer Duty cuts in 2021 and beyond.”
Neil Pattison, Director at Caterer.com, the UK hospitality industry job board:
“The Chancellor’s new cash grant scheme is hugely positive news for the industry and couldn’t have come soon enough. Caterer.com’sHospitality Redeployment Hub – which helps hospitality workers find roles in other sectors – saw applications exceed two million this month as businesses make difficult decisions about the future of their workforce. While these new measures will help, tighter restrictions could mean that the hub reaches four million applications by Christmas and the sector regrettably sees its talent forced to look elsewhere for work. We hope that further announcements, particularly to abandon the 10pm curfew, are made soon to give further support to the sector.”
Nick Mackenzie, CEO of Greene King, said: “We welcome the announcement made by the Chancellor although we look forward to further detail on how local authorities will be distributing the new grants. It’s great that he has listened to businesses and acted as the restrictions imposed on the hospitality sector in Tier 2 areas, combined with the 10pm curfew, are having a crippling impact on trade. This is not sustainable, particularly for our pubs in city centres which are becoming increasingly unviable and this additional support will help to keep people in jobs and businesses open until we can get pubs fully operational again.”
James Walters, managing associate at law firm Lewis Silkin, commented:
“The Chancellor has today announced changes to the Job Support Scheme, which is due to replace the furlough scheme from 1 November.
“This will no doubt help some businesses affected by current restrictions.
“Changes are aimed at supporting businesses in Tier 2 – those who are struggling but not required, under current rules, to shut and whose leaders have described suffering the “slow death” of Tier 2.
“Key for employers in the retail and hospitality sector is that employees will now have to work only 20% of normal hours, down from 33%, meaning an employee who normally works 5 days a week would only have to work 1 day a week to qualify. Also, employer contributions to employee hours not worked has reduced to 5%. This according to government calculations means that for an employee being paid £587 for their unworked hours, their employer would have to fund £44, with the Job Support Scheme covering the remaining cost.
“However, many businesses may simply not be able to offer the minimum 20% of hours to some staff, meaning those staff will not qualify for support under the Job Support Scheme.
“Also, there is an almost total lack of guidance on the Job Support Scheme. So, even if employers are able to offer minimum hours to some staff, it will be difficult for them to agree the necessary changes to working arrangements, which have to be made before the Job Support Scheme starts in a week’s time, until the guidance is published.
“Overarching all of this for large employers is that we still don’t know what the full requirements of the financial impact test are, meaning it is not possible to assess whether they even qualify to claim under the Job Support Scheme, although we understand that further details of that are to be released imminently.”