Sunak’s winter plan ‘nowhere near enough’

The Chancellor’s Winter Economy Plan has been met with dismay from the industry, with proposals of a 33% wage subsidy and two-month VAT cut extension a far cry from the levels of support needed to see businesses survive.

Following the government’s decision to place further restrictions on hospitality earlier this week – implementing a 10pm curfew and table-service only rule – UK Hospitality CEO Kate Nicholls said it was “crucial that the Chancellor delivered support today that specifically targeted the hospitality sector which has been hit harder than any.”

Whilst she welcomed aspects of Sunak’s plan - the longer tax deferrals, option of longer loan repayments, flexible employment support and VAT cut extension - Nicholls stressed the need for more targeted and extended support to protect jobs in the sector.

Calling on government to “pick up the full cost of unworked hours” in hospitality, and extend the 5% VAT past March, she said it must “go further in hospitality, recognising the greater restrictions imposed upon us.”

“The Chancellor has given us some reason to be positive again, but we urge him to engage with the trade on specific measures to keep people in work,” she said. “While some of these measures announced today will give businesses a future to shoot for, and hope that they can begin to rebuild, we are still not out of the woods.”

Hospitality Union founder Jonathan Downey wasn’t so measured, tweeting that the Chancellor’s scheme was “nowhere near enough and will almost certainly lead to the loss of one million jobs in hospitality alone.”

“This government has enforced a reckless and catastrophic new curfew policy that will kill off businesses, but these new measures will do nothing to protect the jobs at risk in our industry,” he said.

Brewdog COO David McDowell echoed this sense of crisis, adding that “the hopes of the sector have been crushed.

“Rishi Sunak hasn’t come close,” he said on Twitter. “Just not enough to avert a crisis facing thousands of businesses and hundreds of thousands of livelihoods. It all stems from a curfew that is seriously misguided and not based on any concrete evidence.”

Night-Time Industries Association CEO Micheal Kill said he was hopeful that the new Jobs Support Scheme will stave off the feared cliff edge of the JRS for many businesses and “throw a lifeline” for employees at risk of losing their jobs.

However, given the continued enforced closure of many late-night operators, Kill called for clarity on what the latest measures may mean for those businesses without a timeline for reopening, adding that further support will be needed for those unable to open or trade.

“We are also very concerned that the extension of business support loans will result in more painful debt for those already overburdened financially, many of whom are languishing in up to three quarters of commercial rent debt with no certainty on when this will be due,” he said.

“The majority of our sector is still unable to even open and trade. Night-time economy businesses have been unfairly targeted by the new 10pm curfew, which we believe has no scientific basis and will prevent businesses from rebuilding the necessary revenue to stay afloat.

“The Government must rethink this curfew and consider further sector-specific support for our industry if it wants to save Britain’s most loved cultural institutions.”

Sharing Kill’s concern for the late-night sector, night time economy advisor for Greater Manchester Sacha Lord said that given the inadequacy of the new measures, he predicts “a tidal wave of redundancies across the UK night time economy as we enter the end of the year.”

Lord accused the Chancellor of turning his back on his initial commitment to stick by all businesses, failing to provide any clarity for live music venues and nightclubs unable to reopen or bound by unviable restrictions.

“It’s now time to acknowledge that many operators, especially independents who have no significant parental backing, will sadly close as a result of this pandemic,” he said.

“We need reassurance that the workers who will inevitably be out of work will be able to claim benefits easily and quickly, that they can apply for retraining schemes, grants and initiatives where possible, and that their mental health will be supported throughout this devastating time.”

British Beer and Pub Association CEO Emma McClarkin said the Chancellor had missed “a golden opportunity to extend the VAT cut to include alcohol,” which would offer critical support to wet-led pubs.

With the upcoming end to the furlough scheme, McClarkin added that the new Job Support Scheme was “needed” but that she is “not confident it is enough to protect jobs in the current trading conditions.”

She also called for a cut on beer duty, an extension of rates relief for pubs “as a matter of urgency,” and for government to consider ways to boost consumer confidence including running a second Eat Out to Help Out scheme.

“Increasing access to Government loans, and extending the lengths to pay them back, will help some pubs, but for many, taking on further debt in the form of a loan isn’t even a viable option, particularly at this stage,” she said.

“We need the Government to recognise that consumer confidence is fragile and the additional restrictions that could be in place for a further six months will only make this worse.”

Greene King CEO Nick Mackenzie said that the aftershocks of the nationwide lockdown, combined with the new restrictions and the “singling out of pubs,” mean “the measures announced by the Chancellor don’t go far enough, especially for drink-led city centre pubs.”

With Public Health England figures showing that only 5% of all outbreaks at the beginning of September were linked to hospitality, Mackenzie shared his frustration at the unfair targeting of the sector.

“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,” he said. “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.”

Food and Drink Federation CEO Ian Wright called for an extension of the furlough scheme in his response to Sunak’s measures, explaining that the requirement for staff to be working part-time in order to be eligible for support under the JSS “will not be enough to sustain hospitality businesses and their food and drink manufacturing suppliers”

“We urge the UK Government to engage with those industries most impacted about what more can be done to support those food and drink businesses most affected by the restrictions,” he said.

Slightly less critical than his counterparts, Deliveroo CEO Will Shu said he was “delighted” at the news of the 5% VAT extension, which “will make a huge difference to thousands of restaurants across the country.”

“The industry has worked incredibly hard to get back on its feet over the past few months, but with new restrictions being put in place this tentative recovery would have vanished overnight without this additional support,” he said.

“The sector still faces significant challenges. Should more stringent lockdown measures be required, this could have a devastating impact on restaurants and the government must be prepared to put in place an even stronger financial package in future.”