Hospitality furlough scheme for coronavirus hotspots

By Emily Hawkins contact

- Last updated on GMT

Further support: the Chancellor has announced additional measures for areas likely to face harsh restrictions next week
Further support: the Chancellor has announced additional measures for areas likely to face harsh restrictions next week

Related tags: Coronavirus, Legislation, Furlough, Jobs, Health and safety, Scotland

Chancellor Rishi Sunak has announced the Government will pay employees who cannot work 67% of their salaries up to £2,100 a month.

The scheme will come into action on 1 November and run for six months before a review. Pub staff must be off work for a minimum of seven days to be eligible.

It is an expansion of the Jobs Support Scheme (JSS), which offered employers a top-up of workers' wages but offered little respite for hospitality employers.

"It will provide a safety net for businesses across the UK who are required to temporarily close their doors, giving them the right support at the right time," Sunak said. 

"Throughout the crisis the driving force of our economic policy has not changed."

It comes as Prime Minister Boris Johnson is expected to outline additional restrictions for pubs and bars in areas reporting the worst infection rates on Monday. It is thought this will include the closure of pubs in the north of England, one in five English pubs.

Cash grants for businesses required to close in local lockdowns will be increased to up to £3,000 per month payable every two weeks, the Treasury also announced.

Safety net

"I hope that this provides reassurance and a safety net for people and businesses in advance of what may be a difficult winter," the Chancellor added.

Under the scheme, employers will not be required to contribute towards wages and only asked to cover NICS and pension contributions if relevant.

Sunak stressed "the exact scope of any restrictions that may be necessary is uncertain at this time" despite reports in the press that the Treasury is expecting to spend hundreds of millions a month on the scheme.

UKHospitality (UKH) said the announcement did not go far enough to help struggling businesses and reiterated calls for the 10pm curfew to be reviewed.

UKH chief executive Kate Nicholls welcome some aspects of the strategy. “Paying two-thirds of wages for employees in lockdown is a welcome step and it is encouraging to see that the Chancellor has introduced flexibility and a sector-specific approach into the JSS and recognises that this is an evolving situation," she said.

"Support for nightclubs and other businesses left in limbo, still unable to reopen, is very welcome. It will help save jobs in a sector that would be sorely missed it were allowed to die.

Go further

“However, worryingly, it does nothing to address the issues faced by sector businesses operating well below capacity due to restrictions and consumers avoiding travel and struggling to keep their workforce employed."

The curfew could be rethought in areas with low coronavirus rates, Nicholls added. 

She said: “The need now is no less – possibly is even more – than the first lockdown, so a more comprehensive package of financial support is crucial. In addition to employment support that must include grants for businesses to cover losses on stock and other overheads, which are piling up.

"We have already seen some high-profile failures and the situation is becoming increasingly unsustainable. The financial support on offer must go further if tragic levels of closures and redundancies are to be averted.”

Related topics: Legislation

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