Sector voices concerns chancellor’s economic measures ‘don’t go far enough.

25th September 2020

Story of the Day:

Sector voices concerns chancellor’s economic measures ‘don’t go far enough’: Sector operators and trade bodies have voiced concerns the economic measures announced by chancellor Rishi Sunak “don’t go far enough” to protect jobs in the industry. Sunak has announced the creation of the Job Support Scheme, which aims to keep employees in a job on shorter hours rather than making them redundant, as well as an extension of the VAT cut to 5% for hospitality businesses until March. But industry bosses have warned further help will be needed if job losses are to be avoided. British Beer & Pub Association chief executive Emma McClarkin said she was “not confident” the Job Support Scheme is enough to protect jobs in the current trading conditions while the chancellor has missed “a golden opportunity” to extend the VAT cut to include alcohol. She added: “It is very concerning to see the chancellor not extend the business rates relief for pubs. Pubs now face a cliff-edge come March 2021 where they will have to pay on average £25,000 each per rate paying pub. That’s a cost of £800m to the sector, which will be the final straw for many pubs.” Fuller’s chief executive Simon Emeny said: “Earlier this week, the prime minister effectively put many pubs into hibernation for six months, and so we needed a package of measures to protect jobs until the spring. This announcement completely misses the mark and will give little comfort to any of the three million, mainly young, people that work in hospitality. The government will need pubs, hotels and restaurants to kick start the economy in the future – but for the second time in a week, it has failed to see our sector as part of the solution.” Jonathan Neame, chief executive of Kent brewer and retailer Shepherd Neame, said: “We are proud we have not made redundancies so far. But these new restrictions continue to impact the full operation of the business and will make it difficult, and in some cases impossible, to perform certain functions. It is with great regret, therefore, that some job losses now look inevitable. We will strive to keep this to a minimum and to look after our teams to the best of our ability and protect the company for the long term.” Greene King chief executive Nick Mackenzie said: “The industry is still dealing with the crippling after-effects of the nationwide lock-down 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 that have again become unviable.” St Austell Brewery chief executive Kevin Georgel said: “The vast majority of hospitality businesses are still losing money or struggling to break even. Paying our teams to work part time only adds to this challenge.” David McDowall, chief operating officer at Scottish brewer and retailer BrewDog, tweeted: “The hopes of our sector have been crushed. 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.” Nic Wood, owner of Edinburgh-based Signature Group, said: “We need hospitality to stay open as a source of employment but also as part of the support system for our collective mental health. The scheme is a step in the right direction, and offers some hope, but we need further measures moving forward.” Deliveroo chief executive Will Shu said the VAT extension would make a “huge difference” to thousands of restaurants across the country. But he added: “The sector still faces significant challenges. Should more stringent lock-down 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.” Hospitality Professionals Association chief executive Jane Pendlebury said: “Even viable businesses that will manage to survive the next few months and beyond will no doubt need to make cuts to staff. But as for those previously viable businesses hoping to just about limp through the pandemic and make it through to the other side the end of furlough, this may prove to be one hurdle too far.”

 

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