UK hospitality sector facing closures as new support package announced
Juliet Mann in London
Europe;UK
02:30

The UK's hospitality sector has faced some big challenges this year. From local cafes to more upmarket eateries, the pandemic has made it hard to survive in lockdown and out.

Now, with restrictions tightening again across the UK, restaurateurs are left stewing.

Michelin-starred chef Jason Atherton says the grants available from the government won't make a dent in his $52,397 per month central London rent. He would rather a full lockdown, if that means better access to state support.

And campaigners want the government to go further to help the sector.

"We really need something akin to the original furlough scheme but something that takes into account trunk payments – that is the tips that hospitality employees earn – so something that is getting people up to 80 percent of their normal salary," said Rachel Harty, founder of HospoDemo, a peaceful protest group set up for hospitality sector workers to have their voices heard.

 

 

The UK's finance minister, Rishi Sunak, has unveiled new measures including cash grants and changes to the job support scheme, to help workers and firms get through the winter as coronavirus cases rise across the nation. If scaled up across the country the package would be worth more than $1 billion.

"It is clear that even businesses that can stay open are facing profound uncertainty," said Sunak in the House of Commons on Thursday.

"This is our plan. A plan for jobs, for businesses, for the regions, for the economy, for the country. A plan to support the British people," he added.

Sunak said the new scheme will be available to all businesses including those not forced to close under England's three-tier system.

 

UK finance minister Rishi Sunak has unveiled new measures including cash grants and changes to the job support scheme. /AP

UK finance minister Rishi Sunak has unveiled new measures including cash grants and changes to the job support scheme. /AP

 

"I'm providing enough funding to give every business premises in the hospitality, leisure and accommodation sector a direct grant worth up to $2,750 for every month Tier 2 restrictions apply," he said.

"That's equivalent to 70 percent of the value of the grants available for closed businesses in Tier 3. And, crucially, I'm pleased these grants will be retrospective. Businesses in any area that has been under enhanced restrictions can back-date their grants to August. Second, to protect jobs we are making the job support scheme more generous for employers.

"Third, as we increase the contribution we are making to employees' wages, I'm increasing our contribution to the income of the self-employed as well," Sunak explained.

It is the third major support announcement in less than a month after he was slammed for not going far enough to help firms through the winter. 

But critics say not enough is being done specifically for the hospitality sector.

The latest survey of the UK economy, carried out by the Office for National Statistics, found that nearly one in five hospitality firms (17 percent) think they are at severe risk of going bust. 

Another 21 percent face a "moderate risk" of collapse – and 7 percent have no cash reserves, leaving them very vulnerable.

 

Around 17% of UK businesses think they are at severe risk of insolvency, according to a survey carried out by the Office for National Statistics. /CGTN

Around 17% of UK businesses think they are at severe risk of insolvency, according to a survey carried out by the Office for National Statistics. /CGTN

 

"Hospitality is the fourth biggest employer in the UK," said Rachel Harty, founder of HospoDemo and an industry marketer.

"We are looking at 750,000 hospitality professionals being out of a job by February and potentially homeless," she said.

Earlier in the week, hospitality sector workers stepped out of the kitchen to take part in a noisy but peaceful protest under the HospoDemo banner in Westminster against recent restrictions imposed on the industry. 

They banged pots, pans, spoons and cocktail shakers to draw attention. Waiting staff, hoteliers, baristas, chefs and more – are campaigning for the government to rethink the new pandemic rules and consider the long-term economic squeeze.

"Things like the 10 p.m. curfew really don't seem to make any sense at all," said Harty. "The fact that a third rush hour has been created with all these people going out on to the streets who have been drinking all evening and possibly not in their normal state of mind seems absolute madness."

Despite hospitality in the UK being a $170 billion industry, responsible for more than 3 million jobs, there is no government minister for hospitality to represent the best interests of these businesses. The sector argues it needs representation as well as a long-term support plan.

 

Video Editor: Fernando Moreno & Paula Harvey