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Operators concerned furlough extension could mean longer closure

05 November 2020 by
Operators concerned furlough extension could mean longer closure

While many operators were relieved yesterday by the extension of the furlough scheme until the end of March 2021, others were concerned this could mean extended closures past 2 December when the English lockdown is due to be lifted.

Jane Pendlebury, the chief executive of the Hospitality Professionals Association (Hospa) said: "The extension of the furlough scheme is, of course, very welcome news for the hospitality industry. However, I can't help but feel it's somewhat ominous. Does this mean that lockdown will be extended beyond 2 December? I suspect so.

"As a sector, we've been incredibly grateful for the support we've received from the government. It's served to keep many of us going through the most challenging of times.

"But, despite this support, there are many previously viable businesses that have had to shut their doors for good. So, whilst we welcome the latest round of measures as a good thing, if lockdown is extended again there will inevitably be many more businesses that go under.

"It goes without saying that, of course, we recognise the need to do whatever is necessary to counteract the virus and save lives, but the gradual disintegration of the hospitality industry, as venues survive one period of lockdown, but not the next, will have a huge knock-on effect. Hundreds of thousands of people's livelihoods hinge on hospitality, and there is only so long that they can hold on."

Posting on Twitter, chef-owner of Heritage in West Sussex Matt Gillan said he was worried rather than relieved by the announcement; while Simon Hulstone, owner of the Elephant in Torquay, said that it was "not a good omen".

Night time economy advisor for Greater Manchester Sacha Lord welcomed the extension but said he has already received messages from operators asking if that means they could be closed until March. "We need urgent clarity", he said.

Sunak said the government will continue to pay up to 80% of wages where employees are unable to work, up to £2,500 a month.

Employers will have to cover the cost of National Insurance and pension contributions.

Sunak said the measures will be reviewed in January "to decide whether economic circumstances are improving enough to ask employers to contribute more".

It means the £1,000 Job Retention Bonus will fall away, though the chancellor said it will be reintroduced "at the appropriate time".

The furlough extension will be available across the whole of the UK.

Sunak added that it was the government's intention for the four-week English lockdown to end at the start of December, but he acknowledged the economic effects are ‘much longer lasting' than the duration of restrictions.

Kate Nicholls, chief executive of UKHospitality, said the extension would provide a "big boost" to save jobs in the "medium-term", but warned businesses would need further help to survive the next six months.

She said: "Keeping jobs alive during this lockdown and throughout a bleak-looking winter period, which is likely to see businesses trading under severe restrictions, is key to the future survival of the sector.

"We will need enhanced grant support to keep venues alive and a solution to the ongoing rent debt problem that continues to linger over the sector. These must come alongside a clear roadmap for a return to business. Without these, the extended furlough scheme alone is not enough to keep hospitality alive and will have been a wasted investment of public funds.

"Surviving the winter is just the first step, too. Beyond that we need action to ensure that businesses can be revived and the sector can play its part in rebuilding the economy. Extending the VAT cut and business rates holiday, coupled with extensive government promotion of tourism and hospitality, will be the bare minimum required."

National Chairman of the Campaign for Real Ale (CAmra) Nik Antona said it was welcome news, but the group continues to call on the chancellor to commit to a long-term, sector-specific financial support package to see pubs and breweries through the tough winter months ahead. "Otherwise, we risk seeing thousands of pubs being forced to close for good," he said.

Photo: Flickr – hmtreasury

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