Chancellor Rishi Sunak extends scheme to October but says employers will be asked to “start sharing” cost of salaries from August
HOSPITALITY industry trade groups have given an initial welcome to chancellor Rishi Sunak’s announcement today (May 12) that the UK Government’s Coronavirus Job Retention Scheme is to be extended by four months to the end of October.
Speaking in parliament this afternoon, Sunak said the scheme, under which the government pays 80% of the salaries – up to £2500 a month – of those unable to work due to the coronavirus pandemic, will remain as is until the end of July.
From August until the end of October the scheme will continue “for all sectors and all regions of the UK” with “greater flexibility”. Employers currently using the scheme will be able to bring back furloughed employees on a part-time basis, he said; and employers will be asked to “start sharing” with the government the cost of paying those salaries. Sunak said further detail on the changes will be provided by the end of May.
Marc Crothall, chief executive of the Scottish Tourism Alliance, welcomed the extension of the scheme until the end of October, saying it “will offer comfort to many” in Scotland’s tourism industry; but he fears it may not be enough to support some seasonal businesses.
“As always, the devil will be in the detail,” he said.
“Given the dependence of Scotland’s tourism industry in terms of seasonality; assurance will not be felt by all.
“There are a great many businesses that will not survive beyond October as it will simply not be viable for them to start trading again until the spring.
“Sadly, the extension to furlough alone will not be sufficient to stop many businesses from making redundancies; however, we look forward to learning more detail over the coming weeks.”
Colin Wilkinson, managing director of the Scottish Licensed Trade Association, said the extension of the scheme “will offer some relief for businesses and staff”.
“We will have to wait on the detail of this support until the end of the month, but there are already concerns on what employers will be asked to pay towards the salaries of their furloughed staff,” he said.
Kate Nicholls, chief executive of UK Hospitality, described the extension of the scheme as a “sensible, positive and timely move”.
“We will now be actively engaging with government about how the scheme will operate beyond July,” she said.
“The full 80% 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.
“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.”
Emma McClarkin, chief executive of the British Beer & Pub Association, said the trade group “cautiously welcomes” the extension and increased flexibility of the Job Retention Scheme, but warned that pubs “cannot remain closed with no revenue coming in, but be asked to cover a higher proportion of employment costs”.
“The government has done absolutely the right thing by extending the scheme and we hope it will prevent job losses,” she said.
“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 whilst we reopen under social distancing conditions. This means removing the £51k 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.”