Trade needs further Government support says industry associations

UKHospitality (UKH) and the British Beer & Pub Association (BBPA) have called on the Government to provide further support when it comes furloughed staff, insurance companies, grants, rent and loans.

UKH boss Kate Nicholls highlighted a number of areas where Government aid was not having the intended impact of supporting businesses, while many firms struggling to access support and others excluded from schemes, while giving evidence to the House of Commons Treasury Committee (Tuesday 21 April).

This included that despite an extension to the Coronavirus Job Retention Scheme (CJRS), about 350,000 hospitality workers are missing out as they are seasonal workers or hit by technicalities, including new starters and those unable to provide a pay slip.

She also outlined hospitality businesses had been frustrated by the Coronavirus Business Interruption Loan Scheme (CBILS) with a survey of UKH members showing half (50%) of businesses had applied for a loan but just 18% had secured one and 58% are still awaiting a response. As well as this, UKH said some banks had indicated they would not lend to hospitality businesses and EU state aid rules were getting in the way of investment.

Nicholls also pointed out almost three quarters (71%) of hospitality business is carried out in a venue with a rateable value of more than £51,000 and, therefore, ineligible for a grant but this was not restricted to large pubs because community-based venues also don’t qualify.

When it comes to insurance, 71% of UKH members had claims rejected and bolt-on coverage allowing businesses to claim was too expensive for many firms.

Serious damage

UKH also said it expects serious damage to the sector when rents are next due without an extended moratorium, businesses required a lead time after reopening before beginning rent repayments with a schedule needed for this.

It added a rent moratorium would allow businesses to focus on paying suppliers and the sector had confidence it can return to near full strength if it is supported on rents.

The BBPA called for an extension to the CJRS beyond June along with asking the Government to underwrite 100% of the CBILS.

In addition, it asked for direct insurers to be fair and supportive when assessing insurance claims, to put in place a special exemption for the 10,000 pubs with a rateable value of more than £51,000, and to defer April’s beer duty payment as well as the payment for the following quarter, in a bid to ease cash flow.

UKH’s Nicholls said: “Government support for businesses has been swift and it has helped many businesses get over the initial shock of the crisis. It is clear, however, that too many businesses are struggling to access support and that the schemes in place must be extended and enhanced.

“Hospitality was the first sector to be hit hard by the crisis and it will be one of the last to make a recovery. Even when lockdown measures are lifted, our sector faces a huge challenge in getting customers back through their doors and finding solutions to social distancing measures that are likely to be in place.

“Business support needs to be boosted immediately to make sure every business that needs it can access it. Scrapping thresholds for grants and support with rents will keep businesses alive and keep jobs open.”

Tackling gaps

She added: “This support then needs to be carried over after the worst of the crisis has passed. If it is abruptly switched off, all the good work that has been done during these difficult weeks will be undone. Hospitality is going to be battling with the effects of this for months, if not years, and support from the Government cannot be stopped until businesses are back up to full strength.”

The Government needs to tackle the gaps facing pubs and brewers amid the Covid-19 pandemic, according to the BBPA.

Chief executive Emma McClarkin said: “We’re extremely grateful to the Government for listening to the needs of our sector and delivering the support they have given to pubs and brewers so far.

“There are still more than 10,000 pubs that currently aren’t eligible for any Government grants. Even for those pubs that are eligible for grants, they can’t come soon enough. Brewers too need more support in the form of a duty deferral to free up much-needed cash during this crisis.

“Pubs may have to remain closed longer than any other business, so it is imperative the Government tackles the gaps in support facing our industry.

“If the Government makes these interventions we are pressing them for, it will help keep pubs and brewers afloat, so they can reopen and serve their communities once more when we are through this.”