Chancellor, Rishi Sunak, has announced an expansion of the Job Support Scheme following calls to save the ailing hospitality sector, where half of the workforce remain on furlough and nearly one in four businesses fear collapse in the next three months.
The deal has been announced ahead of a statement by Boris Johnson on Monday (12 October 2020), in which the Prime Minister is expected to announce pub and restaurant closures in high-infection areas.
Sunak offered businesses that are legally required to close their doors – a large proportion of which will be in the hospitality sector – cash grants of up to £3,000 per month to cover fixed costs and furlough their workers. Staff will receive 67% of their wages from the government, while employers will not be asked to pay anything to workers beyond National Insurance and Pension Contributions.
Unite the Union described the scheme as a “disaster”, pointing out that it does not solve any of the problems unions and employers have been pointing out for months.
There is still no support for businesses who are not in local lockdown areas despite 23% of hospitality employers saying they will not survive the next three months.
While the Job Support Scheme expansion may help to keep businesses afloat in regions that are hardest hit by the Coronavirus, workers – who currently earn an average of £8.84 per hour – will be expected to get by on just two-thirds of their usual wage.
This will be further complicated by the fact the hospitality sector is the main employer of zero-hour contract workers, accounting for 22% of the zero-hour jobs in the economy. Where zero-hour workers are furloughed, it is unclear how their wage will be calculated and their income could be minimal if they have not been given many shifts in recent weeks.
The TUC, too, called for better provision for vulnerable sectors. Frances O’Grady said: “Firms which aren’t required to close but will still be hit by stricter local restrictions need a more generous short-time working scheme. And there needs to be extra help for self-employed people in local lockdown areas too.
“Nationally, industries like the arts, hospitality, retail and aviation face a long, tough winter. These sectors need targeted help. And we need proper investment to create good new jobs in the green tech of the future.”
Unite put forth its own “rescue package” for the hospitality sector, focusing on sector-specific financial support and retraining the workforce.
The union called for the government to retain workers on 80% of their wages, as it does now, and provide an equal level of support to employers who keep their workers on shorter hours. In order to qualify for the scheme, employers must meet conditions such as giving all workers contracts that outline minimum and maximum hours.
Unite’s Hospitality Rescue Package would be partly paid for by a Sector Support levy on those corporations that have profited out of the reduction in custom to pubs and restaurants, such as Tesco, which recently posted 23% profits and 21% rises in shareholder dividends. Funds should also be redirected from the £1.3bn in Coronavirus emergency support money that the government is currently trying to claw back from local councils, the union said.
Further, Unite urged the government to provide regular testing of frontline hospitality workers – mirroring a similar call by Labour Leader Keir Starmer in a piece for the Daily Telegraph yesterday – and to set up a Hospitality Commission that would allow employers, unions and government to strategise for the future, including in terms of retraining the workforce.
“The government must not allow this extremely important sector, employing millions of people, to fail,” Howard Beckett, Assistant General Secretary at Unite, said.
“Behind every job lost is a person, and lots of these workers have financial responsibilities and families to support. Their jobs are viable, were it not for the crisis measures in place.
“Hospitality workers must be supported and we urge the government to implement our policy proposals.”