‘Increased flexibility for hospitality vital’

By Nikkie Thatcher

- Last updated on GMT

More breathing space: trade bodies react to the extension of the furlough scheme
More breathing space: trade bodies react to the extension of the furlough scheme

Related tags coronavirus

The extension of the furlough scheme has been met with cautious optimism from trade bodies, along with calls for flexibility to allow pubs to reopen.

The Government’s Coronavirus Job Retention Scheme (CJRS), commonly known as furlough, will be extended by four months​ to the end of October, Chancellor of the Exchequer Rishi Sunak outlined in a series of tweets yesterday (Tuesday 12 May).

Setting out his four-point plan at 12.35pm, Sunak said the CJRS would continue, therefore providing UK businesses with eight months’ worth of support.

Businesses and employers will be asked to start sharing, with the Government, the costs of paying people’s salaries, he said in a third tweet.

Further detail about the process and what it will look like would be announced at the end of May, Sunak said in his fourth and final tweet when announcing the new plans.

UKHospitality chief executive Kate Nicholls called the scheme extension a “sensible, positive and timely move”.

Crucial lifeline

She added: “The scheme has been a crucial lifeline for many businesses and employees. It has helped hospitality overcome the initial crisis, saved businesses and kept jobs open.

“We will now be actively engaging with Government about how the scheme will operate beyond July. The full 80% (salary paid by the Government up to £2,500 per month per employee) may need to be extended past July for some businesses in sectors like hospitality that will still operate at much reduced levels of trade, or not yet be able to open. Our businesses will need as much warning as possible if they are to be expected to plan ahead for eventual venue reopenings.

“Increased flexibility for hospitality will be equally vital. Hospitality businesses are not able to go from standstill to full capacity overnight. The additional flexibility being introduced to the scheme will allow our workers to return to work in a safer, graduated way – that is crucial to help the Government to safeguard public health, jobs and businesses.”

The extension was cautiously welcomed by the British Beer & Pub Association chief executive Emma McClarkin.

She said: “The extension is particularly important to pub and brewery staff as they will not be able to return to their work as quickly as other sectors. Yesterday, we were given a glimmer of hope that pubs could reopen in July and we will work hard with Government to help this happen safely.

“However, if pubs and breweries are expected to pay a proportion of furlough costs while remaining closed, it could still lead to significant job losses for our sector. Pubs and breweries cannot remain closed with no revenue coming in, but be asked to cover a higher proportion of employment costs.

“The increased flexibility announced today allowing for part-time working beyond July is imperative and also welcomed. It will enable pub and brewery staff to come back on a part-time basis, which will be crucial as pubs and breweries reopen under social distancing restrictions.”

Additional financial support

McClarkin added the Government had done the right thing by extending the scheme and she hoped it would prevent job losses.

She added: “We will await to see the full detail at the end of the month so that we understand how much it will help our sector and how it will work in conjunction with the reopening plans for pubs and breweries.

“In the meantime, we continue to urge the Government to bridge the significant gaps in the current financial support our sector faces as we ask them to help us get back on our feet while we reopen under social distancing conditions. This means removing the £51,000 rateable value cap on grant eligibility as well as extending grants, improving access to loans, and further support for brewers on beer duty.  

“Without additional financial support – specifically for pubs and brewers – the social hubs and heart of communities in many towns, villages and cities across the UK will remain at risk.”

Wine & Spirits Trade Association (WSTA) chief executive Miles Beale said the trade body was pleased about the extension, including about more flexibility to allowing staff to return on a part-time basis.

“The support will continue, in full, until the end of July, giving our members much-needed breathing space to plan for a way out of lockdown. It is essential for those in the hospitality sector and their suppliers, who are prevented from reopening, that they receive the same 80% salary support until the end of October,” he said.

“We are continuing to push for the Government to broaden the definition of hospitality to ensure the suppliers to our pubs and restaurants don’t slip through the net and end up facing closure.”

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