Sunak’s support ‘welcome but still a long way to go’

By Nikkie Thatcher

- Last updated on GMT

Related tags: Government, Finance, Legislation, Chancellor, Jobs

Chancellor of the Exchequer Rishi Sunak’s latest financial aid announcement including cash grants, extended support for the self-employed and changes to the Job Support Scheme has been met with trepidation from trade bodies.

UKHospitality boss Kate Nicholls described the support as “hugely generous” and said it was welcome just when the trade needed it.

She added: “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 when the restrictions began to bite.

“This gives businesses a much-enhanced chance of being able to overcome the challenges and survive into 2021, 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.”

The British Beer & Pub Association (BBPA) said the new support addressed some of the concerns it had highlighted to the Treasury.

Necessary and welcome

What support has the Chancellor announced for pubs?

  • Pubs in the 'high' second tier are eligible for grants up to £2,100 a month - backdated to August and for the time venues are operating with restrictions. The funds will be distributed by local councils.
  • The Job Support Scheme has also changed ahead of its start date next month. Instead of a minimum requirement of paying 55% of wages for a third of hours, pubs will have to pay for a minimum of 20% of usual hours worked, and 5% of hours not worked. The Government will now fund 62% of the wages for hours not worked, more than doubling the maximum payment to £1,541.75.
  • For self-employed publicans, the Government is doubling the self-employed grants from 20% to 40% of previous earnings, meaning the maximum grant will increase from £1,875 to £3,750. Grants are available for all self-employed workers, across all tiers who have stopped trading or have experienced a “significant” fall in trade, with two further payments to come.

Chief executive Emma McClarkin 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.”

She labelled the cash grants of up to £2,100 for businesses in tier two areas as a “crucial lifeline for pubs”.

McClarkin added: “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.”

Economic and cultural catastrophe

Night-Time Industries Association (NTIA) is concerned the additional support announced by the Chancellor is too late for many businesses.

NTIA chief executive Michael Kill said: "Any help from the Chancellor is welcome as many businesses, employees and freelancers are gasping for air in an attempt to survive, given the restrictions levied across the sector.

"But the brutal reality is that for so many businesses, employees and freelance workers this is too little too late as we have already lost several hundred thousand jobs in the weeks leading up to this announcement.

"With regard to our sector, the Government seems solely focused on restricting our ability to operate to suppress virus transmission through modelling worst case scenarios. But it needs to model the economic consequence of these restrictions too, as the damage to this sector is wreaking havoc on people’s lives. They are risking plunging large parts of society into economic and cultural catastrophe.

"Despite this latest support, many businesses still have some key questions around commercial rent debt, and more importantly have an ongoing need for a roadmap to recovery."

While the support is welcome, the Campaign for Real Ale (CAMRA) urged the Chancellor to look at help for the future.

Chief executive Tom Stainer said: “Pubs in areas under tier two restrictions felt like they had the worst of all worlds, with additional restrictions reducing trade further but without receiving additional support - so these new financial support packages, which CAMRA had called for, will be warmly welcomed by the beer and pubs sector. 

“New funds for councils to issue grants for pubs and hospitality businesses, together with reducing the contributions businesses have to pay towards staff wages, will give pubs in areas with high and very high restrictions a much better chance of surviving.  

“We hope the Government will now encourage all local councils to use the 5% of additional discretionary funding available to make sure that breweries and cider makers receive grants and the financial support they need to cope with reduced trade. 

“But we are not out of the woods yet. The Chancellor must look at a long-term package of financial support covering pubs and brewers in all tiers to help them cope with reduced trade and knocked consumer confidence from measures like the 10pm curfew. This would make sure we avoid permanent mass pub closures and keep our locals, which are at the heart of our communities, open and alive through the difficult weeks and months ahead.”

Related topics: Legislation

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