Yesterday (22 October), the Chancellor announced a new financial package targeted specifically at firms operating under the tighter restrictions enforced under Tier 2 of the Government’s Coronavirus alert system.
The measures included a scheme whereby hospitality businesses that have been adversely impacted by the restrictions will be able to claim a cash grant of up to £2,100 per month; and an overhaul of the yet-to-be-launched Job Support Scheme (JSS), which is set to replace the Job Retention Scheme (JRS) from the beginning of November.
Aimed primarily at supporting jobs in Tier 2 areas, the necessary hours employees need to work to qualify for the JSS will be reduced from 33% of normal hours to 20%, and the employer contribution for the hours not worked – originally set at 33% - will be reduced to 5%.
The Government will provide up to 61.67% of wages for hours not worked, up to £1541.75 per month.
Having spoken to hospitality operators earlier in the day, Sunak said: “Their message is clear, the impact is worse than they hoped.”
Analysis of Government data by real estate advisor Altus suggests Tier 2 measures, which bars households from mixing in any indoor setting, are adversely affecting the trade of some 12,422 restaurants in England, as well as 11,798 pubs.
Cities currently under Tier 2 restrictions include London, Leeds, Newcastle and Birmingham, with Stoke-on-Trent, Coventry and Slough set to also move into the ‘high’ alert level this weekend.
Chefs and restaurateurs in London have condemned the new measures for not going far enough to truly protect businesses.
“It’s genuinely insulting,” says Tom Brown, chef patron of Hackney hotspot Cornerstone.
“£500 a week is nothing, for us to us that’s around seven or eight customers worth of takings, and this week alone we had 100 cancellations.
“It’s like [the Government] have taken all the food off the table and thrown us a scrap while expecting us to be grateful."
Sommelier and restaurateur Xavier Rousset, who owns The Black Book in Soho, says similar.
“A grant of £2,100 a month doesn’t even touch the sides, especially in Soho,” he says.
“It’s just a further distraction from the slow death of the hospitality industry - it’s agonising.”
The reactions starkly contrast with those of trade body UKHospitality, who said the Chancellor’s intervention was a ‘huge and very welcome intervention’ and would ‘save hundreds of thousands of jobs’ in hospitality and supply chain.
“This is a hugely generous package of support and very welcome news just when we needed it," said UKHospitality chief executive Kate Nicholls.
“The changes to the JSS 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.
“This gives businesses a much-enhanced chance of being able to overcome the challenges and survive into 2021, 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.”
However, Stuart Procter, COO of the Stafford Collection, wonders how the grants are going to help businesses, describing the offer as ‘quite an unimpressive amount’.
“It's too little too late,” he says.
“Of course, I'm glad we've got some support. However, looking at London in particular, it's just not going to touch the sides.
“Since the curfew was brought into place, revenue has dropped by 35% for us across [Stafford-owned Fitzrovia restaurant] Norma and The Stafford, and that just keeps getting worse with the introduction of Tier 2.”
Many have said the focus needs to be put on rebuilding consumer confidence and lessening the restrictions placed on businesses in the sector.
“It’s great the Government is stepping up, but the restrictions do not make our business financially viable nor do the contributions to the employees help to make their lives sustainable,” says Melanie Brown, founder of Brixton-based restaurant and wine bar The Laundry.
“We’re an industry that survives hand to mouth and we can’t afford job schemes because we aren’t trading sustainably.”
Brodie Meah, co-founder of Top Cuvée in Highbury, echoes Brown’s words.
“Support is good but now we need a plan to rebuild consumer confidence so we can continue long term,” he says.
“Why are we being encouraged to stay open, but reduce staff hours? Either it’s safe to go to a restaurant or it’s not.”