Chancellor Rishi Sunak to outline future plans for scheme today
AN extended and flexible furlough scheme is “critical to the survival” of hospitality businesses which are to be among the last to reopen.
That’s the message from trade groups, which have issued a fresh call for chancellor Rishi Sunak to extend the UK Government’s Coronavirus Job Retention Scheme ahead of his speech later today (May 12) on future plans for the scheme, which is currently in place until the end of June.
Prime minister Boris Johnson said on Sunday (May 10) that it would be July 4 at the earliest before hospitality, including “food service providers, pubs and accommodation”, businesses would be able to reopen. The UK Government’s COVID-19 Recovery Strategy states: “Some venues which are, by design, crowded and where it may prove difficult to enact distancing may still not be able to re-open safely at this point, or may be able to open safely only in part. Nevertheless the government will wish to open as many businesses and public places as the data and information at the time allows. In order to facilitate the fastest possible re-opening of these types of higher-risk businesses and public places, the government will carefully phase and pilot re-openings to test their ability to adopt the new COVID-19 Secure guidelines. The government will establish a series of taskforces to work closely with stakeholders in these sectors to develop ways in which they can make these businesses and public places COVID-19 secure.” The Scottish Government has not yet issued a timeline for businesses reopening.
Trade groups say the continuation of the Coronavirus Job Retention Scheme is vital for the survival of hospitality businesses facing a prolonged closure period, and which will be unable to reopen or face trading at reduced capacity when restrictions are lifted.
UK Hospitality, the British Beer & Pub Association and the BII have written to the chancellor calling for the continuation of 80% furlough pay until the end of September and for it to be maintained in some form for the rest of the year; and for a removal of the three-week maximum period to increase flexibility for reopening businesses.
Kate Nicholls, chief executive of UK Hospitality, said the furlough scheme has been a “crucial lifeline” for many businesses and employees.
“As the government, and businesses, begin to think about reopening, it is vital that furlough support continues,” she said.
“Abruptly turning it off would be a disaster and undo the good work that the government has already done.
“When lockdown lifts, a substantial number of hospitality businesses will be unable to reopen again and many of those that can will still be operating far under normal capacity. Confidence among businesses for the rest of the year with even best-case scenario predictions pointing to a huge drop in trading.
“Without continued support through the furlough scheme businesses will fail and people will lose their jobs.
“We have reiterated our call for an extension of the scheme and an increase in flexibility to provide the maximum support and opportunity for businesses and their employees. If we do not get it, we are looking at an even greater threat to a sector that has already been hammered.”
The trade groups have also reiterated calls for the chancellor to remove the £51k rateable value cap on grant eligibility.
In a joint statement, the organisations said: “We know that pubs, hospitality and brewers can be crucial in driving economic recovery.
“We thank the chancellor for his support thus far but urge him to enable venues across the country to play their role by opening in a safe fashion, when the time is right.
“Surviving the crisis can only happen with further support from government, allowing pubs to not only pull through but deliver future prosperity.”
