New wage subsidy scheme does not go far enough, warns hospitality industry
The embattled UK hospitality sector has given chancellor Rishi Sunak’s latest job retention scheme a lukewarm reception, saying the new wage subsidy does not go far enough.
UK Hospitality, a lobby group representing British pubs, clubs, restaurants and bars, said it wanted industry-specific help.
Boss Kate Nicholls said she wanted the government to pick up the full cost of unworked hours.
The reaction came after Sunak announced in the House of Commons that the government’s furlough scheme will end on 31 October.
It will be replaced by a wage subsidy scheme that will have employers paying the bulk of worker wages, so long as staff members are working at least 30 per cent of usual hours.
Nicholls said the government covering two-thirds of part-time staff wages “would be a relatively low cost for huge reward for our workforce”
Instead, she suggested “full support to sustain people in their jobs during what could be a bleak winter for hospitality”.
It means staff working for employers not already back up and running may face redundancy as they will be ineligible for the scheme.
The financial support from the government comes after it increased restrictions on social gatherings, return-to-work guidance and a shortening of pub and restaurant hours, which Nicholls called “a hammer blow” to the industry.
From tonight pubs, bars and restaurants must close their doors from 10pm each night.
At an afternoon press briefing Sunak hit back at the assertion that certain hospitality job losses were simply a “price to be paid” of coronavirus restrictions.
The chancellor also said the government had already provided industry-specific help for the hospitality sector, alluding to the successful Eat Out to Help Out scheme in August.
“Everyone in the industry isn’t currently paying business rates, small businesses have been granted grants of £10,000 and £25,000, there were specific initiatives over the summer, and a VAT cut, which has just been extended,” Sunak said.
“There’s been considerable amount of support for that industry and they can still take up this new policy”.
VAT cut extension
UKHospitality did back Sunak in extending the 15 per cent VAT cut for the hospitality sector to March.
Nicholls said: “Things were looking grim for our sector yesterday and we were desperately hoping for some good news.
“We urge him to engage with the trade on specific measures to keep people in work.”
However, the British Beer & Pub Association said: “The VAT cut extension on food and soft drinks will help our sector and it is great to see the Chancellor answer our urgent call for this. However, the extension is only for six weeks and only takes us through to the end of the current restrictions – it needs to be much longer to help our sector recover.
Sunak had earlier unveiled his Winter Economic Plan in the Commons, where he said: “The primary goal of our economic policy remains unchanged – to support people’s jobs – but the way we achieve that must evolve… I cannot save every business, I cannot save every job.”