In an open letter to Chancellor Rishi Sunak, Nathan J Evans, managing partner at Smith & Wollensky restaurant, asks how restaurants can be expected to survive until 8 December, when they can make a claim under the JSS.
“The Job Support Scheme would replace the furlough and 61.67% would be paid by the treasury as long as employees worked 20% of the usual week. Our contribution would be 5%of the unworked hours,” says Evans.
“Unlike the furlough scheme which allowed regular submissions and regular reimbursements, the new scheme would be paid in arrears. When we asked? From the 8 December you said.
“Here lies the question Mr Sunak and the entire hospitality sector awaits your response. When revenues are so low that businesses need the support of their owners and shareholders simply to keep the lights on, how can they find the enormous sums of money needed to support employee earnings until the JSS claim can be made?
Under the JSS, eligible employees are only required to work 20% of their normal hours, for which they are paid by their employer. For any hours not worked, the government contributes 61.67% of normal pay with employers contributing 5% and the remainder unpaid.
"You are asking us all to pay for the actual hours worked + 5% of unworked hours + the government’s contribution for those unworked hours (61.67%) for 6 weeks. Money we and many other operators simply do not have," writes Evans.
"Surely the government understands that cash-flow is so unbelievably tight, that such a scheme will break so many of us. More redundancies must surely follow."
In the letter, Evans calls on Sunak for an urgent review of the JSS to allow claims to be made weekly or fortnightly to minimise the cash requirement.
Evans also asks the Conservative party to “make good” on its manifesto pledge to review what he says are the “outdated and unfair business rates system” and in the short-term commit to the current business rates holiday being extended throughout 2021.
“Rather than supporting people to stay at home, give more support directly to business operators, which means a more generous grants system to assist with ongoing costs,” he adds.
Evans also says in the letter that the high street banks’ interpretation of the British Business Bank rules have made it almost impossible to access funding for many, while others he says are expected to repay debt at interest rates of 5% and above.
“We don’t need more debt, we are carrying more than enough.
“We are the businesses that create the jobs, 3.2 million of them in fact – the third largest private sector employer and two times greater than financial services.
“If this really is a Conservative Government of Business - help us to achieve that, with a clear route to recovery and more targeted support.”