Hospitality sector unimpressed with Sunak’s lockdown grant
Pubs, restaurants and breweries in England have given a lukewarm reception to Rishi Sunak’s offer of grants of up to £9,000 to help them survive until the spring, warning the financial “sticking plaster” will not stave off closures in the long term.
On the morning after the prime minister imposed a seven-week lockdown that will force hundreds of thousands of businesses across England to close, the chancellor announced a £4.6bn package of support for the retail, hospitality and leisure industries.
Rishi Sunak unveils £4.6bn relief package for UK retail and hospitality sectors
But with the hospitality sector on its knees, having been singled out for tough restrictions, industry figures called for a more comprehensive long-term plan, while craft breweries decried a lack of support for their previously thriving industry.
“While this announcement is most welcome, make no mistake that this is only a sticking plaster for immediate ills,” said Kate Nicholls, chief executive of the trade body UK Hospitality.
“It is not enough to even cover the costs of many businesses and certainly will not underpin longer-term business viability for our sector.”
More than half a million businesses across England will have to close due to the third lockdown, according to the real estate adviser Altus Group.
Most are non-essential retailers that were previously able to trade but the number also includes 27,022 restaurants and 37,515 pubs, many of which have already been shut for extended periods, including the lucrative Christmas weeks.
Admiral Taverns boss Chris Jowsey, whose company leases premises to 1,000 publicans, said most would still be unable to cover their costs, with smaller venues particularly vulnerable.
“It won’t be sufficient to stave off a lot of difficulties and closures,” he said.
The grants, worth £277m across England’s pubs sector, are based on the “rateable value” of a premises, effectively the rent the site could command on the open market.
Those with a rateable value above £51,000 – typically larger pubs such as big chain venues – can get the maximum £9,000 grant. Smaller venues with a rateable value of less than £15,000 – often community pubs that largely serve alcohol – are only eligible for £4,000.
Jowsey said this amounted to about £1,000 a month if restrictions on opening stay in place until the end of March.
Together with existing support worth £1,334 a month for smaller pubs, the combined package falls well short of the £3,000 he said smaller pubs needed just to keep their heads above water.
“That’s got to cover everything, including living expenses and feeding their family,” said Jowsey. “It doesn’t leave anything for rent.”
About two thirds of Admiral’s 1,000 pubs fall into the smaller venues category in terms of rateable value – less than £15,000 – and the company is charging them a maximum of £500 per month, about a third of what they would usually pay.
Pub and beer trade bodies said extra support from the government provided a lifeline but would only bring short-term respite, with far more comprehensive measures needed in the long-term.
British Beer and Pubs Association chief executive Emma McClarkin said: “Without this support, pubs across England were at real risk of being lost for good at the beginning of this year.
“We had been anticipating permanent closures in the very short term without it.”
She said their longer-term survival would required an extension of business rates relief and the cut to VAT on hospitality to 5%, which is due to expire at the end of March. She also called for a cut in beer duty.
The real ale group Camra called for a long-term sector-specific support package to help pubs survive.
“While one-off grant support is welcome, it is nowhere near enough to cover the haemorrhaging costs for pubs and breweries that don’t see any end in sight,” its chair, Nik Antona, said.
Camra also backed the anger expressed by small breweries’ trade body Siba that pubs will not be allowed to serve takeaway beers during the lockdown.
Siba’s chief executive, James Calder, said craft breweries, which have not been eligible for much of the support available to the hospitality sector, had already lost 80% of their route to market due to the closure of pubs.
“Sales through takeaway, click-and-collect and drive-through have enabled many to just about survive up to now,” he said.
“This reversal in policy directly discriminates against small businesses while allowing supermarkets to continue to sell beer from global breweries.”
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