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UKH: Additional extensive financial support crucial

Published:  12 October, 2020

UK Hospitality (UKH) has welcomed the new support for closed hospitality businesses but said that support for others must go further, repeating its call for a much more comprehensive package of support for the whole sector to cover rent and other overheads.  

Following the new support measures announced by the government on Friday (9th October), UKH said that “additional extensive financial support is crucial for businesses trading under restrictions”. 

As part of the new support, businesses forced to shut will see two-thirds of workers’ wages subsidised by government while cash grants are also being increased, with up to £3,000 per month available, linked to a property’s rateable value.

However, UKH has warned that businesses facing restrictions such as curfew, compounded by diminished consumer confidence, must have a bespoke scheme, reiterating calls that the Chancellor’s Job Support Scheme (JSS) must remove employer contributions to preserve jobs.

At present the scheme does not go “nearly far enough to help such businesses”, said the industry body.

“Paying two-thirds of wages for employees in lockdown is a welcome step and it is encouraging to see that the Chancellor has introduced flexibility and a sector-specific approach into the JSS and recognises that this is an evolving situation,” said CEO Kate Nicholls. 

However, it did nothing to address the issues faced by sector businesses operating well below capacity due to restrictions and consumers avoiding travel and struggling to keep their workforce employed, she added.

“The curfew has been crippling for many hospitality businesses, with sales down around 30% even in areas of low infection. A more comprehensive support package for our businesses affected must follow swiftly if they are to survive the winter and avoid contributing to mass unemployment. If the government is serious about saving jobs, it needs to rethink the mandatory curfew in areas where Covid rates are low,” said Nicholls.

The need now was “no less, possibly it's even more”, than the first lockdown, she added. “A more comprehensive package of financial support is crucial. In addition to employment support that must include grants for businesses to cover losses on stock and other overheads, which are piling up.”