New “Plan for Jobs” unveiled by Chancellor Rishi Sunak

Following on from:

the Chancellor of the Exchequer has today (22 October 2020) delivered a ‘Plan for Jobs’ statement to the House of Commons (that you can download below), in which – amongst other things – he said:

The evidence is clear: a regional, tiered approach is the right way to control the spread of the virus …. but it is clear that even businesses who can stay open are facing profound economic uncertainty.

This morning, I met with business and union representatives, including those from the hospitality industry, to discuss the new restrictions. Their message was clear: the impact of the health restrictions on their businesses is worse than they hoped. They recognise the importance of the tiered restrictions in controlling the spread of the virus. But a significant fall in consumer demand is causing profound economic harm to their industry. It is clear that they, and other open-but-struggling businesses, require further support.

So, Mr Speaker, I am taking three further steps today.

First, I’m introducing a new grants scheme for businesses impacted by Tier 2 restrictions, even if they aren’t legally closed.

We will fund local authorities to provide businesses in their area with direct cash grants. It will be up to local authorities to decide how best to distribute the grants giving them the necessary flexibility to respond to local economic circumstances.

But I’m providing enough funding to give every business premise in the hospitality, leisure and accommodation sectors a direct grant worth up to £2,100 – for every month Tier 2 restrictions apply. And that’s equivalent to 70% of the value of the grants available for closed businesses in Tier 3. And crucially, I am pleased to confirm these grants will be retrospective. Businesses in any area which has been under enhanced restrictions can backdate their grants to August ….

…. Second, to protect jobs, we are making the Job Support Scheme more generous for employers. If businesses are legally required to close, as we’ve already outlined, the Government will cover the full cost of employers paying people two thirds of their salary, where they can’t work for a week or more.

For businesses who can open, it is now clear that the impact of restrictions on them, particularly in the hospitality sector, is more significant than they had hoped.

So I am making two changes to the short time work scheme to make it easier for those businesses to keep staff on, rather than make them redundant. First, under the original scheme, employees had to work for 33% of their normal hours. Now, we will ask them to work only 20% of their hours. Second, the employer contribution for the hours not worked will not be 33%, as originally planned, or even 20% as it is in the October furlough scheme – it will reduce to 5% ….

…. Third, as we increase the contribution we’re making towards employees’ wages, I’m increasing our contribution to the incomes of the self-employed as well. Today, we are doubling the next round of the self-employed income support from 20% to 40% of people’s incomes, increasing the maximum grant to £3,750.

UKHospitality has responded to the Chancellor’s statement as follows:

UKHospitality praises generosity of increased financial support for businesses

Commenting on the announcement, UKHospitality Chief Executive Kate Nicholls said:

“This is a hugely generous package of support and very welcome news just when we needed it.

The changes to the Job Support Scheme will help to safeguard hundreds of thousands of jobs and the grant support will provide a crucial lifeline for businesses struggling with low footfall and ongoing costs. It is excellent that the grant has been backdated to the date when the restrictions began to bite.

This gives businesses a much-enhanced chances of being able to overcome the challenges and survive into 2021, to sustain businesses so they can begin to recover next year and play a vital role in helping boost the economy.

It is encouraging to see the Government listening to and understanding the plight of hospitality, which is dire. We are pleased to see that the measures extend to hotels and B&Bs, too.

It is important now that grants are processed as quickly as possible as businesses are on the brink after weeks of curfew and severe restrictions.

There is still a long way to go and we will be in close contact with the Government to make sure that our members, and the whole of hospitality, gets the support it needs and deserves. This is a significant step forward for us, though, and a hugely valuable lifeline for businesses to stay afloat and keep as many staff as possible in their jobs”

The BBPA has responded as follows:

Enhanced support package will help thousands of pubs and livelihoods impacted by tier two restrictions

BBPA welcomes new package of support announced by the Chancellor 

The British Beer & Pub Association, the leading trade association representing brewers and pubs, has welcomed the enhanced support package for businesses impacted by tier two restrictions across the UK announced today. 

The trade association said the new package, which includes cash grants and an enhanced Job Support Scheme, addresses some of the concerns it had been highlighting to Treasury. It said the measures will help thousands of pubs who have seen their businesses greatly hampered by tier two restrictions, but until now were not receiving any support.

It said though that more support was still needed for brewers and those in the supply chain that serve pubs.

Emma McClarkin, Chief Executive of the British Beer & Pub Association, said: 

“This necessary and welcome support package will help thousands of pubs with tier two restrictions who otherwise faced devastation to their businesses.

The impact of restrictions has been immediate and deep on our sector, requiring an extensive response from Government. The measures announced today recognise this and that the tier two restrictions make most pubs and hospitality businesses completely unviable.

Having called for more support for businesses in our sector struggling under tier two restrictions, we warmly welcome these measures from the Chancellor today. They will help thousands of pubs and support thousands of jobs that otherwise were at real risk of being lost for good.

We welcome the enhanced Job Support Scheme package for businesses, which we hope will protect more livelihoods in our sector. People are at the heart of pubs and have been our priority throughout this crisis.

Additional cash grants for businesses under tier two restrictions also provide a crucial lifeline to our pubs, which we welcome. We look forward to seeing the detail on the grant delivery and hope these will remain under review in terms of covering actual fixed costs for businesses forced to close in tier three.

It is imperative these grants are made exempt from EU State Aid restrictions to ensure they reach all the businesses that need protecting. If they are not made exempt, then they simply won’t reach the businesses that need them. They must also be delivered quickly to ensure pubs do not permanently close due to lack of cash flow caused by not receiving the grants in time to save them.

The beer and pub sector has been under severe pressure since the beginning of the crisis. 90% of pubs are currently unable to make any profit. Our brewers are forecasting sales through pubs to be 50% down this year. Make no mistake more will need to be done to support Britain’s brewers and those in the pub supply chain who currently do not benefit from grants, as well as regular reviewal of the restrictions – including the 10pm curfew – to stimulate public confidence and increase trade. This will require further stimulus measures including Business Rates, VAT and Beer Duty cuts in 2021 and beyond.”