Trade bodies call on Chancellor to extend JRS to October for hospitality sector

28-May-2020 - Last updated on 13-Jul-2020 at 11:36 GMT

The British Beer & Pub Association (BBPA), British Institute of Innkeeping (BII) and UKHospitality have called on the Chancellor to extend the Coronavirus Job Retention Scheme (JRS) 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 businesses within the sector to fully get back up and running whilst the furlough scheme remains in place.

They say a failure to take action now could result in thousands of redundancies.

It comes as the Chancellor prepares to announce more details regarding the phasing out of the JRS.

At present employers can claim a grant for 80% of a furloughed employee's wage, up to £2,500 a month.

However, this week the Chancellor is expected to announce that from August, employers will be expected to contribute 20% of the employee's wage, with the Government paying the remaining 60%.

The trade bodies say this measure could lead to thousands of furloughed jobs being lost, unless venues can reopen safely and be operationally and commercially viable businesses by July.

As well as asking the Government to extend the JRS for the sector in its full form until October, they are also calling on it to adopt the advice and guidance of the World Health Organisation (WHO) from July, which suggests using one metre for social distancing as opposed to two metres.

This, they say, would significantly increase the number of pubs that could safely reopen from one-third to three-quarters in July.

Reducing the contact gap is something the Prime Minister asked the Government's top scientists to review yesterday (27 May) during a Liaison Committee meeting.

“It is absolutely crucial that the furlough scheme is extended, in its full form, until the end of October," says UKHospitality CEO Kate Nicholls.

“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.”

A recent Hospitality Leaders Poll by MCA Insight/HIM revealed that more than 40% of hospitality businesses won’t be able to contribute a penny to the JRS from August, unless they are operating at full capacity by then.

Respondents said that the Government needed to bring in additional measures to help the hospitality sector, including allowing businesses coming out of lockdown to top up the furlough for part time staff.

"Part time furloughing needs bringing in prior to August," said one multi-site operator.

"It should be allowed at same time as hospitality lockdown restrictions are removed."