‘We’re being suffocated by the government’: Rishi Sunak’s job support measures not enough, say businesses

While some have welcomed the chancellor’s latest scheme for workers, certain industries are unconvinced it will be enough to see them through the winter

Pubs, bars and nightclubs are among businesses warning that the new measures announced by Rishi Sunak to support jobs will not be enough to prevent further closures and a surge in unemployment.

Meanwhile, the government’s plans for self-employed workers were described as “woefully inadequate” and leaving contractors facing a “dark winter ahead”.

The chancellor unveiled a new scheme to subsidise wages from November, when the UK is forecast to be hit by a wave of redundancies as the furlough scheme ends.

While some businesses welcomed the additional support, it is far less generous than the scheme it replaces, and many firms fear they will not survive the winter.

The centrepiece of Thursday’s announcement was a short-time working scheme that will allow companies to cut down employees’ hours, with the government contributing towards wages for the hours not worked.

However, staff costs per hour go up under the scheme because employers will still contribute to hours not worked. For example, a person who works one third of their hours (the minimum required to be eligible) would have 55 per cent of their wages paid by their employer, with the government paying 22 per cent.  

Employers will also be able to claim a previously announced £1,000 job retention bonus for staff they keep on until the end of January.

Pubs and bars

For pubs, whose revenues have plunged and have recently had their opening hours cut short by government restrictions, the support seems insufficient.

“The government is restricting the hours we operate and are providing no direct support to help the venue’s loss of income,” said James Lindsay, managing director of the company that runs Royal Vauxhall Tavern in London.

An extension of government-backed loans and repayment terms, also announced on Thursday, simply adds more financial burden on already struggling businesses, Lindsay adds.  

“The government restrictions on the Royal Vauxhall Tavern’s business mean we now can only operate four hours a day. This is not creating confidence in our business recovery. Pre-Covid we had a commercially viable business, and we are being suffocated by the government approach.”

Peter Hunter, director of Dockleaf Bar in Liverpool, agreed. Many in the industry feel the chancellor’s plan is “potentially just not enough to save their businesses”, he said.  

“There’s a multitude of costs associated with opening bars and restaurants,” he said, adding that all of these need to be considered, not just staffing and VAT on food, which the chancellor has focused on.

“There are so many other industries that feed off ours, and the limbo we have been forced into has really sent a tidal wave of effects back.”

Greene King boss Nick Mackenzie warned that today’s measures would not be enough to help Britain’s pubs recover from the “crippling” effect of the lockdown and new restrictions announced this week.

Independent retailers and cafés

For Charles Snoxell, owner of the Pantry café in High Wycombe, any government support is welcome but it would make more difference to his business if the customers had confidence the virus was under control.

He has already been forced to lay off staff and thinks today’s announcement will make little difference to his business’s prospects for the coming months.

“It’s easier to have a smaller number of full-timers than banks of people working part-time,” he said.

“I think a lot of employers will feel the same. It will help some people but for others I’m not sure what difference it will make.”

He believes there will be a lot of job losses from next week. “It doesn’t look like there is going to be any discernible improvement for hospitality businesses. I can’t see that people are going to start coming out more - if anything it will be less.”

Smaller retailers were handed a lifeline earlier in the year with the introduction of a business rates holiday.  

Andrew Goodacre, chief executive of the British Independent Retailers’ Association, said he was disappointed that the chancellor gave no indication he would extend the rates holiday beyond April. 

"Now, more than ever, our independent retail sector needs the government's help if it is to survive this crisis," he said.

Self-employed workers

One in three self-employed people has been excluded from government previous job schemes and there was no change to that position in Sunak’s winter plan.  

The other two-thirds, who are eligible for the self-employed income support scheme, will see that help extended but it will cover only 20 per cent of trading profits.

“The support for the self-employed announced today is woefully inadequate,” said Andy Chamberlain, director of policy at the Association of Independent Professionals and the Self-Employed (IPSE).  

“Limited company freelancers and the newly self-employed almost entirely missed out on support in the last lockdown and have faced bleak months of financial devastation. Now they face a dark winter ahead unless the government does more for them."

Live events industry

Social-distancing has made it impossible to put on most live events and, with case numbers on the rise, workers fear the sector will be decimated within weeks.

Businesses that rely on live events for their income are “on the verge of collapse”, said Peter Heath, co-founder of campaign group #WeMakeEvents. Research published this week reveals almost half of events businesses have furloughed 90-100 per cent of their staff.

Mr Heath added: “With the increased restrictions introduced by government earlier this week, it’s looking unlikely that the sector will be able to return to work in a way that is financially viable over the next six months. There’s simply no work to return to, with demand drying up in line with social-distancing measures.  

 “As a result, the majority of businesses in our sector will not be able to generate sufficient revenue to support their contribution towards employees’ salaries, nor will they be able to contract the huge self-employed community the events industry has become so dependent upon.”