Coronavirus furlough program extended by Rishi Sunak until March 2021

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Restaurant workers still retained by their employers will see 80% of their wages paid until March of next year, after the government announced it would extend the coronavirus job retention program (aka leave) until the end of the first quarter in 2021.

The announcement – another government turnaround – comes after the industry’s leading trading body, UK Hospitality, wrote to Chancellor Rishi Sunak on Tuesday, demanding that a package of government support be commensurate with the severity of the new lockdown restrictions and the likely effect they will have. on the chances of taking over hotel companies. The body had requested that the leave be extended until the end of April next year – and that it include a “flexible support” program, the same type of which was introduced for the months of August, September. and October, prompting employers to fire more workers. return on fewer hours, while theoretically offering a “full” salary.

Sunak had planned to replace the leave program with a new, less generous employment support program this week, but the Prime Minister’s announcement on Saturday that non-essential businesses in England would close forced the Treasury to rethink. Speaking in the House of Commons this afternoon, the Chancellor said: ‘I have always said I will do whatever it takes to protect jobs and livelihoods across the UK – and that has meant to adapt our support as the trajectory of the virus has changed. “

Sunak added: “It is clear that the economic effects are much more lasting for companies than the duration of the restrictions, which is why we have decided to go further with our support.” The Chancellor also announced that support for self-employed workers would increase from 55% to 80% of business profits, up to a maximum of £ 7,500.

There is no sign of a flexible support package from the government yet, however, but Sunak said the scheme will be reviewed in January to assess whether employers should contribute wages for hours not worked.

In response to the Chancellor’s announcement, UK Hospitality said the extension was ‘a big boost’ and ‘the key to the industry’s future survival’, but that a broader set of support was still needed .

“The hotel industry is facing a difficult winter ahead […] and businesses will need additional support if they are to survive, ”said CEO Kate Nicholls. “We will need an increased subsidy to keep the sites alive and a solution to the rent debt problem that persists in the area. These must accompany a clear roadmap for a return to business. Without it, the extended leave program alone will not be enough to keep the hospitality alive and will have been a wasted investment of public funds.

On the critical issue of rent, which, thanks to a combination of avoidance, delay and magical thinking remains unresolved, is high on UK Hospitality’s priorities. It is now likely that the moratorium on lease confiscation will be extended (for a fourth time) until some point in the first quarter of the new year. UK Hospitality has requested its year-end extension until June 30, 2021. But on its own, that doesn’t solve anything; it only shifts the problem into the uncertain future. A spokesperson for the trade body also told Eater, “We basically need a fair and workable solution ASAP – rebound subsidies would be a smart solution. Proposals that included bouceback grants were submitted to the government as early as August of this year.

In a statement, Nicholls added that surviving this winter was “just the first step”, reiterating the call for an extension of the tariff holidays for the entire 2021/22 period – a request echoed by London Mayor Sadiq Khan – and an extension of the VAT reduction. A spokesperson for UK Hospitality told Eater that a reduction to ‘percent percent would be ideal, but if it is to be higher, it has to be at a level that makes us competitive with other tourist destinations, such as France, Germany, Ireland, [whose pre-Covid rates ranged between seven and nine percent.] »

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