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Pub sector urges Chancellor to maintain furlough scheme at 80% to October and increase its flexibility

The British Beer & Pub Association (BBPA), British Institute of Innkeeping (BII) and UKHospitality (UKH) have called on the Chancellor to extend the Job Retention Scheme to October and increase its flexibility for the pub and hospitality sectors.  

In a letter to Rishi Sunak, the trade bodies have urged the Chancellor to maintain the furlough salary for pub and hospitality staff at 80% until October, allowing the sector, which is 2 months behind reopening compared to the rest of the economy, to fully get back up and running whilst the furlough scheme remains in place to save jobs.

In the same letter, they have also asked the Chancellor to introduce flexibility into the furlough scheme earlier than the current scheduled date of the start of August, to help fit with the sector re-opening from 4th July.

READ THE LETTER HERE

The call comes as the trade bodies revealed today that thousands of furloughed pub jobs could be lost, unless pubs can safely re-open and be operationally and commercially viable businesses by July, so that they can afford to pay their staff.

Likewise, the call comes as reporting suggests that businesses will have to pay a further one-fifth of the wages of furloughed employees from August in announcements expected this week. This is in addition to any top ups already being made to the 80% paid by Government up to £2,500 per month.

The trade bodies are therefore also calling on the Government to adopt the advice and guidance of the World Health Organisation from July, which suggests using one metre for social distancing as opposed to two metres. This, they say, would help businesses to get back up and running to serve their communities again – significantly increasing the number of pubs that could safely re-open from one-third to three-quarters in July and at levels that would be more commercially viable, saving thousands of businesses and jobs whilst also still ensuring customer safety.

According to all three trade associations, many venues are already looking at operating plans and preparing additional safety protocols to reassure staff and customers they can create a safe socialising environment.

Hospitality was one of the first sectors to be closed by the Government back in March, and will be one of the last to re-open after lockdown. 10,000 of the UK’s 47,000 pubs are also still ineligible for any Government grant support, with many who are eligible for help still waiting for Government grants and loans to trickle down to them. For those jobs that cannot yet return, due to being unable to open or having severely limited capacity, full support should remain in place. 

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

“We very much welcome the Government’s extension to the furlough scheme, which has been a lifeline to pubs and pub jobs. However, unless social distancing restrictions are reduced to the WHO’s suggested one metre, two-thirds of pub jobs could be lost.  It is vital that the Government allows pubs to re-open under those safe conditions in July, so that they can operate at a sustainable level and become pillars of the community once more.

“Under two metre social distancing rules, pubs will have less space to operate with so will need less staff. Many pubs won’t even be able to re-open, yet they could be expected to cover part of their staff furlough costs from August without any money coming in. Such a situation would mean either pubs closing for good or jobs being lost.

“Pubs have been closed since March with no income coming in. Expecting many to contribute to furlough costs whilst they are still closed is madness. The decision for the Chancellor is simple, extend the furlough scheme at 80% for our sector until October to save hundreds of thousands of jobs.”

BII CEO, Steven Alton commented:

“As the lifeblood of so many of our villages, towns and cities, pubs have been doing incredible things to support their communities, raising money for charity, feeding the vulnerable and caring for their customers throughout lockdown. We ask that the Government recognises the importance of pubs, not only for their significant economic contribution and millions of jobs but also to the fabric of our society, by continuing the full furlough support for pub staff.”

 Kate Nicholls, CEO, UKHospitality said: 

“It is absolutely crucial that the furlough scheme is extended, in its full form, until the end of October. This is a central ask of our #Fair4Hospitality campaign and it is necessary for the survival of vast swathes of the hospitality sector and our employees’ livelihoods.

“Some businesses will reopen in July, but many will be trading at far below full capacity. They will be operating with reduced income and will likely incur additional costs to ensure social distancing measures are in place. Businesses will have to continue to furlough some staff members and they will need Government support to do so.

“The reality is, that after five months of virtually no earnings, facing start-up costs up and additional ongoing costs, businesses will simply not be able to contribute to the furlough scheme from August. The sector will only be taking its first baby steps and to expect businesses to go from a standstill to full speed immediately will only lead to venues shutting their doors for good and see staff lose their jobs.”