The Chancellor yesterday announced his latest measures to help alleviate the ongoing and growing impact from Covid-19. We have received incredible levels of feedback from across the industry and have featured some below.
Trying to measure the collective tone from industry leaders and commentators seems to point towards appreciation for what has been done, with varying levels of discontent that more wasn’t.
The focus of the Chancellor’s measures were in trying to keep as many businesses and jobs as possible alive for the time being. Such is the scale and scope of the economic crisis that Sunak repeatedly used the term ‘viable’ in his address to colleagues in the House of Commons. Cancellation of the next budget added emphasis to the unique nature of the economic crisis we are currently all navigating.
The new jobs support scheme outlined yesterday will replace the existing furlough scheme coming into play in November. The new scheme currently has a lifespan of six months aiming to support reduced hours. It will require employees to complete a minimum of one third of their normal hours to qualify for support that will be capped just below £700 per month.
The measure will in all likelihood stem a flood of unemployment in November when circa 2.5 million people end benefiting from the furlough scheme.
The measures follow the Prime Minister earlier this week announcing stringent curfew regulations on hospitality businesses that severely limit the ability of most if not all to trade. The 10pm ‘closing’ time called will of course do much more than take one hour from commerce.
UKHospitality Chief Executive Kate Nicholls commenting on yesterday’s announcement by the Chancellor said: ““The announcement of flexible employee support is a move in the right direction, but hospitality needs more targeted efforts to support jobs. Almost 1 million people in our sector are still on furlough. We need Government to go further in hospitality, recognising the greater restrictions imposed upon us, and pick up the full cost of unworked hours. This would be a relatively low cost for huge reward for our workforce. Full support to sustain people in their jobs during what could be a pretty bleak winter for hospitality would be a great step forward.”
Nick Mackenzie, Greene King chief executive, said: “The industry is still dealing with the crippling aftereffects of the nationwide lockdown and the cumulative effect of the new restrictions, combined with the singling out of pubs, mean the measures announced by the Chancellor don’t go far enough, especially for drink-led city centre pubs. More targeted support is needed to help those people whose pubs remain closed, or businesses that were starting to recover which have again become unviable.
“With Public Health England figures showing only 5% of all outbreaks are linked to hospitality, it feels like pubs are being unfairly targeted when there is little evidence that they enable the spread of Covid-19. Like the rest of the industry, we are doing all we can to help fight the virus and have invested significantly in ensuring that our pubs are safe for customers which is reflected in PHE’s data.”
Will Hawkley, UK head of leisure at KPMG, said: “With the ‘Eat Out to Help Out’ initiative already a distant memory, the Job Retention Scheme fast unwinding and COVID-19 re-engaging its firm grip on the nation, the leisure and tourism industry has understandably been feeling uneasy, if not left questioning its survival prospects. Depressed demand during the autumn and winter months – both within leisure and tourism – presents its own issue, with the addition of further social distancing restrictions amplifying the challenge.
“While The Chancellor may have demonstrated that the sector’s woes haven’t been overlooked, most businesses are likely to conclude that the extension of the VAT cut, and the latest job support measures don’t go far enough. As things currently stand, those that can quickly adapt and evolve their operating models in line with the restrictions will be more successful. Sadly not all operators will be able to survive and further job losses will be inevitable without further Government support.”
Commenting on the Chancellor’s announcement on new Covid-19 support measures, Christian Mole, EY UK & Ireland Head of Hospitality & Leisure, said: “While the hospitality sector will welcome the support measures announced today, including Pay As You Grow, the Job Support Scheme and the sector-specific VAT rate freeze, many will have been hoping for more generous direct intervention in recognition of the particular challenges that the sector faces. Social distancing measures continue to constrain both operating capacity and customer demand, and pubs and restaurants have been further impacted by the 10pm mandatory closing time.
“The hotels sector will face depressed demand for some time due to decreased business travel and inbound tourism, which may result in continued closures and resulting job losses.
“The hospitality sector was already facing difficulties before the pandemic and is now undergoing an accelerated transformation. Businesses that are resilient enough to survive may ultimately emerge to form a healthier and more profitable sector, but a smaller footprint could be the cost.”
Emma McClarkin, Chief Executive of the British Beer & Pub Association, said: “Following the additional restrictions announced earlier this week and their devastating impact on the already precarious situation our sector is in, we were really hoping for a strong package of support today. Some elements of the Chancellor’s plan today are welcome, but do not go nearly far enough to save the thousands of pubs and jobs that we have highlighted are at serious risk.”
The mood throughout hospitality from the conversations and messages we have received is one of trepidation, uncertainty prevails and as such confidence is diminished. Despite that many that we have spoken with still remain resilient and determined to overcome the current challenges in the hospitality business.
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