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SLTA News And Updates 24th September

SLTA News and Updates 24th September

SLTA says Chancellor’s announcement ‘not giving us any grounds for optimism’ and calls for more support.

The Scottish Licensed Trade Association has described Chancellor Rishi Sunak’s measures to help stave off business closures and mass redundancies, particularly within the hospitality industry, as “not giving any grounds for optimism”. The trade association warned that without further additional sector-specific support, many business owners will have no choice but to close down, leading to job losses.

Delivering a speech in Parliament, the Chancellor announced a package of measures intended to protect jobs and help businesses through the uncertain months ahead as we continue to tackle the spread of the virus. The package includes a new Jobs Support Scheme intended to protect millions of returning workers, extending the Self Employment Income Support Scheme and an extension of the 15% VAT cut for the hospitality and tourism sectors, and help for businesses in repaying government-backed loans.  

The main points in his announcement are:-

  • The furlough scheme, which comes to an end in October will be replaced with the Job Support Scheme from 1stNovember.   Under the scheme, which will run for six months, the government will contribute towards the wages of employees who are working fewer than normal hours due to decreased demand and employers will continue to pay the wages of staff for the hours they work. For the hours not worked, the government and the employer will each pay one third of their equivalent salary.   Employees must be working at least 33% of their usual hours. The level of grant will be calculated based on employee’s usual salary, capped at £697.92 per month.   The scheme aims to stop mass job cuts after the introduction of new government measures to tackle the upsurge in coronavirus cases.   The Job Support Scheme will be open to businesses across the UK even if they have not previously used the furlough scheme, with further guidance being published in due course.
  • The Chancellor announced support for self-employed individuals by extending the Self Employment Income Support Scheme Grant (SEISS). An initial taxable grant will be provided to those who are currently eligible for SEISS and are continuing to actively trade but face reduced demand due to coronavirus. 
  • As part of the new package of support, the government also announced it will extend the temporary 15% VAT cut for the tourism and hospitality sectors to the end of March next year. 
  • Business who deferred their VAT bills will be given more time to pay back, with the option of paying smaller instalments through the New Payment Scheme.
  • There will be greater flexibility for firms repaying a Bounce Back Loan; measures include extending the length of the loan from six years to ten, interest-only periods of up to six months and payment holidays will also be available to businesses. These measures will further protect jobs by helping businesses recover from the pandemic.
  • The Coronavirus Business Interruption Loan Scheme will give lenders the ability to extend the length of loans from a maximum of six years to ten years to help businesses to repay the loan.

The Chancellor’s statement can be read here.

In responding to the Chancellor’s announcement, Colin Wilkinson, SLTA managing director, commented:

“Without having full details, our initial view is that the Chancellor’s introduction of a Jobs Support Scheme and the extension of other initiatives to help businesses are not as far-reaching as we needed – we are very disappointed.

It must be recognised that the Jobs Support Scheme is significantly less generous then the Coronavirus Job Retention Scheme. It is designed to back ‘viable jobs’ – and with the latest restrictions on our pubs and bars, many jobs in our sector will be unviable. It is also not clear at the moment how the scheme will be implemented.”

Mr Wilkinson continued:

“The extension of government-backed loans, such as the Business Interruption and Bounce Back loans repayment dates through the measures announced in the ‘pay as you grow’ scheme and the extension of VAT relief for the hospitality industry until March 31 next year are welcomed but will have minimal effect. 

These are long-term measures of business support. The industry is struggling to survive now and operators need support today through additional comprehensive sector-specific support for the hospitality sector, highlighted by the Chancellor as a sector which has been hit the hardest.

More must be done for a sector operating under serious restrictive measures.”

If support is not forthcoming, Mr Wilkinson added:

“The future for businesses and employees will still be under threat as many business owners may still have no choice but to close.   A recent survey highlighted that nearly 40% of hospitality businesses were considering closure or business exit while a recent SLTA survey highlighted that, within the pub and bar sector, 12,500 jobs could go.”

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