Following yesterday’s announcement from the Chancellor on how the government intends to help companies as furlough comes to an end, UKHospitality has called for further ‘targeted support’ to retain employees in our sector.
Rishi Sunak announced a new Jobs Support Scheme, which would see the government ‘top up’ wages of workers, covering two-thirds of their hours.
To be eligible, employees must work a minimum of 33% of their hours and for the remaining hours not worked, the government and the employers will each pay a third to ‘top up’. It means that employees working only 33% of their normal hours will still receive 77% of their pay.
The scheme will run for six months, starting on November 1 and has been designed to bring people back to work and protect viable jobs, rather than making workers redundant.
Commenting on the announcement by the Chancellor, UKHospitality chief executive Kate Nicholls said: “The announcement of flexible employee support is a move in the right direction, but hospitality needs more targeted efforts to support jobs. Almost 1 million people in our sector are still on furlough. We need Government to go further in hospitality, recognising the greater restrictions imposed upon us, and pick up the full cost of unworked hours. This would be a relatively low cost for huge reward for our workforce. Full support to sustain people in their jobs during what could be a pretty bleak winter for hospitality would be a great step forward.”
The Chancellor said that the VAT for hospitality and tourism businesses will remain at 5% until March 2021.
Speaking to the House of Commons, Sunak detailed plans to keep the 5% VAT in place past the original cut-off date of January next year, bringing hope to thousands of concerned hospitality firms.
Nicholls adds: “Looking ahead, the extension of the VAT cut was absolutely critical. UKHospitality had pushed hard for it, so it is great to see the Government taking note of our major concerns about recovery into 2021, though this must be extended further. The announcement of longer tax deferrals and the option of longer loan repayments should deliver some much-needed breathing room for employers.”