Hospitality leaders and trade bodies have welcomed the chancellor’s furlough extension until March, but warned that without a clear roadmap and additional support it won’t be enough.
Speaking in the Commons yesterday (5 November), Rishi Sunak confirmed that businesses will be able to continue to claim 80% of staff wages through the Jobs Retention Scheme – up to £2,500pcm - if they are forced to remain shut after the second lockdown comes to an end.
UK Hospitality CEO Kate Nicholls welcomed the move as a “big boost” for the sector, but warned that a broader package of support will be needed if businesses are to survive the next six months.
“We will need enhanced grant support to keep venues alive and a solution to the ongoing rent debt problem that continues to linger over the sector,” she said. “These must come alongside a clear roadmap for a return to business. Without these, the extended furlough scheme alone is not enough to keep hospitality alive and will have been a wasted investment of public funds.
“Surviving the winter is just the first step, too. Beyond that we need action to ensure that businesses can be revived and the sector can play its part in rebuilding the economy. Extending the VAT cut and business rates holiday, coupled with extensive Government promotion of tourism and hospitality, will be the bare minimum required.”
The British Beer and Pub Association CEO Emma McClarkin said that although the furlough extension provides some certainty and support in the immediate months ahead, government must consider its longer-term support strategy.
“We will need to use the time in lockdown to review the current restrictions within the tiering system to ensure they are effective, proportionate and fair,” she said. “We also need a longer-term stimulus package for our sector that enables it to play a leading role in the social and economic recovery. This requires an extension of the VAT cut and the Business Rates holiday, as well as a significant beer duty cut.
“If such a stimulus package is forthcoming, we will begin to see the light is at the end of the tunnel for our sector in this immensely difficult period.”
Night Time Industries Association CEO Michael Kill welcomed the move, but said it was “somewhat belated” given the mass closures and redundancies already taking place in the sector.
“The furlough scheme will absolutely help preserve jobs within the sector, but the challenge still remains, where there is still a considerable void in financial support for night-time economy businesses, will there be jobs to go back to?” he said.
“We appreciate safety is paramount but, at some point, we’ve got to consider the human element here and the immense pressure individuals, venues owners, staff and freelancers are under at the moment given the current financial, economic, cultural and social well-being environments that are being presented by government, particularly around our sector.”
Jane Pendlebury, CEO of the Hospitality Professionals Association (HOSPA) said the extension was “somewhat ominous” in that it could point to an elongated lockdown.
“The extension of the furlough scheme is, of course, very welcome news for the hospitality industry,” she said. “However, I can’t help but feel it’s somewhat ominous. Does this mean that lockdown will be extended beyond 2 December? I suspect so.
“As a sector, we’ve been incredibly grateful for the support we’ve received from the Government. It’s served to keep many of us going through the most challenging of times. But, despite this support, there are many previously viable businesses that have had to shut their doors for good. So, whilst we welcome the latest round of measures as a good thing, if lockdown is extended again there will inevitably be many more businesses that go under.”
Sunak said the policy will be reviewed in January to see if employers can contribute more to the scheme, which is estimated to cost up to £1bn.
Furlough extension a “wasted investment” without additional support
Hospitality leaders and trade bodies have welcomed the chancellor’s furlough extension until March, but warned that without a clear roadmap and additional support it won’t be enough. UK Hospitality CEO Kate Nicholls, BBPA CEO Emma McClarkin and NTIA CEO Michael Kill have all argued that without enhanced grant support, a VAT and business rates extension and clear roadmap, the extension won’t be enough to save businesses. CEO of the Hospitality Professionals Association Jane Pendlebury added that the extension in itself was “ominous” and could point to an elongated lockdown.