'Nowhere near enough' - PM pledges paltry one-off payment for wet-led pubs

By James McAllister

- Last updated on GMT

'Nowhere near enough' - PM pledges paltry one-off £1,000 payment for wet-led pubs

Related tags: Coronavirus, lockdown, Coronavirus tier system

The Prime Minister has announced that wet-led pubs forced to remain closed under Tier 2 and 3 restrictions will receive a paltry one-off grant payment of £1,000.

Confirming the new funds in a statement to the House of Commons earlier today (1 December), Boris Johnson said the money was intended to recognise how hard pubs have been hit by Covid restrictions during what would typically be their busiest time of year.

He added that MPs understood and appreciated the 'anguish' of pub operators, claiming that the Government would do 'everything in its power' to support the hospitality sector.

However, the announcement that further state support will only equate to a single £1,000 payment is likely to only add to the growing hostility much of the industry feels towards the Government.

Voices from across the sector immediately lambasted the grant sum, which equates to roughly £32.26 per day. 

Simon Emeny, the chief executive of brewers Fuller, Smith and Turner, said the one-off payment will not be enough to save many wet-led pubs.

“A thousand pounds really doesn’t go any way to solving the financial armageddon that many individual and independent operators are going to face,” he told BBC Radio 4’s The World at One.

“The challenge for wet-led pubs is if they don’t sell food they will find it impossible to operate, but you have still got bills to pay.

“They have still got to pay potentially rent, insurance costs, national insurance and the apprenticeship levy. That is far more than £1,000.”

Others took to Twitter to vent their frustrations.

"Seriously, £1,000 per wet led pub in December," wrote Chris Soley, chief executive of Camerons Brewery.

"Boris Johnson it’s game over for many in the sector now. You have single-handedly destroyed our sector, lives and livelihoods."

The Campaign for Pubs, meanwhile, described the payment as 'derisory'.

"This is not enough to cover costs & doesn’t go anywhere near enough to make up for the loss of December trade or avoid hardship for pub families," it said.

"Already many publicans are in debt."

The Prime Minister's announcement of the new grant came as he opened a debate on the new tougher tier restrictions, which will come into force across England tomorrow (2 December) and see hospitality venues in Tier 3 areas forced to remain closed and only allowed to offer takeaways, while those in Tier 2 will only be able to serve alcohol with 'substantial meals'.

More than 31,000 hospitality businesses are set to be impacted​ by the new Tier 3 restrictions, with a further 21,451 wet-led pubs and bars forced to remain closed under Tier 2, according to real estate adviser Altus Group.

Trade body UKHospitality has warned​ that should the restrictions last the entire month of December, an estimated £7.8bn worth of trading will be wiped out across the sector when compared to 2019.

Between 70 and 100 Tory MPs are threatening to oppose the Government when the new tier system is put to a vote in Parliament later today, but despite this the new measures are still expected to pass due to the Labour opposition's decision to abstain.

Criticising the restrictions as designed to unfairly target hospitality, UKHospitality said the £1,000 doesn't even count as a token gesture.

It warned that nine months of business support and job protection supplied by the Government is at risk, as are future tax revenues, for the want of a final targeted support package. 

Calling for greater, immediate targeted support, the trade body has demanded an urgent, targeted replacement of the Job Retention Bonus (JRB), saying the removal of this policy alongside the extension of furlough left a £2.1bn black hole in the finances of hospitality businesses.

It also demands an extension of the rent debt moratoria, which is due to end on 31 December, through to June 2021; compensation of businesses for losses incurred as a result of the restrictions; an extension of the current VAT cut; and a business rates holiday for the whole of 2021 to enable businesses to rebound next year.

“A one-off payment of £1,000 for pubs forced to close does not even count as a token gesture," says Kate Nicholls, UKHospitality chief executive.

Equivalent to just 1.1% of last year’s takings, it falls far short of the bare minimum required to keep these businesses alive.

“The Government’s entire approach to this lacked any sliver of logic, as evidenced by the farcical debate around scotch eggs over the past 24 hours.

"There needs to be a much clearer and supportive approach from the Government and this means providing far more support immediately.

“The new tier system condemns nine out of ten hospitality businesses to being unviable by the New Year.

"This is not just a threat to community wet led pubs but also neighbourhood restaurants independent hotels, nightclubs and other hospitality venues who are now staring failure in the face. The sector will lose £8bn of revenue in December and bear £0.3bn of costs of closure and restricted trading.

“The Government’s own figures say a third of businesses are at risk of insolvency.

"This jeopardises over a million jobs and threatens collapse across the supply chain.

“The Prime Minister himself said that he was asking hospitality to bear a disproportionate burden to allow the reopening of all other parts of the economy and pay for our festive bubbles but the compensation is derisory.

"It is vital that they bring forward a more comprehensive package of emergency and long-term support to stave off the collapse of the 3rd largest sector and export earner - a sector vital to our economic recovery."

Related topics: Business & Legislation

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