Chancellor 'should extend furlough and credit insurance'

By Rod Addy contact

- Last updated on GMT

Johnson: 'We will not pull the rug out'
Johnson: 'We will not pull the rug out'

Related tags: Finance, Supply chain, Regulation

Chancellor Rishi Sunak should extend the Government's furlough and credit insurance schemes in his March Budget announcement to support the food and drink industry and others hit by COVID-19-related lockdowns.

That's according to Ian Wright, chief executive of the Food and Drink Federation, who was responding to Prime Minister Boris Johnson's outline of the Government's plan for easing pandemic restrictions.

Wright argued that it would take some time for hospitality and foodservice venues, and their suppliers, to recover from the hit they had taken. They could not simply bounce back to full health from the moment they reopen.

“It is disappointing but wholly expected that the Prime Minister’s roadmap shows no signs of taking account of any input from business,"​ said Wright.

"For a great many of the food and drink manufacturers supplying the hospitality and foodservice sectors, a return to ‘business as usual’ seems an awful long way off. As such, it is only correct that the Chancellor outlines significant extensions to the furlough and credit insurance schemes as part of his Budget announcement next week.

'Additional support'

"The food and drink industry is the UK’s largest manufacturing sector. It will therefore be key to the country’s economic recovery, with a footprint in every region. Now is the time for Government to provide additional support to ensure those businesses most at risk can play their part in putting the country back on its feet.”

 

Key dates

From 8 March:​ All pupils in schools and further education establishments will return to face-to-face teaching; breakfast, after school clubs and other activities for children to reopen; two people can meet outside; Apprentices will also be able to return to factories for practical learning;

From 29 March:​ Rule of six will be reintroduced, enabling up to six people from two different households to meet outside or in private gardens; outdoor sports facilities will reopen; outdoor sports will resume;

From 12 April:​ Non-essential retail, including hairdressers, indoor leisure facilities such as gyms will reopen, as will holiday lets, but only for use by individuals or household groups; pubs and restaurants can open for al fresco eating and drinking; zoos, theme parks and drive in cinemas will reopen, as will public libraries and community centres;

From 17 May:​ Most restrictions on outdoor meetings of up to 30 people will be lifted; up to six friends or family members from two households will be able to meet indoors; pubs and restaurants will reopen indoors, as will indoor cinemas, children's play areas, hotels, hostels and B&Bs, theatres and concert halls and sports stadia;

From 21 June:​ All legal limits on social contact, ceremonies and other live events will be removed; nightclubs will reopen.

Emma McClarkin, chief executive of the British Beer & Pub Association, said: “Whilst we have received earliest possible dates for reopening, our sector will continue to face severe restrictions that limit their business and stop them from being viable. The reality is debt is mounting and many pubs simply won’t be able to hold out to April or May and will close for good before any door gets open. 

“Outdoor service only from April 12 will likely mean that three in five pubs across the UK will remain closed. That’s 29,000 pubs still not able to open either because they don’t have any outdoor space or simply because they will not be commercially sustainable. Because of this, the majority of pubs will not reopen until 17 May at the earliest, meaning that they will have been closed for almost eight months. 

“It will mean just 17% of our pubs’ capacity will open from April. That will cost our sector £1.5 billion. The Government must now plug that £1.5 billion hole for our sector with vital support in the Budget next week if thousands of pubs are now to survive." 

VAT cut and Business Rates relief

McClarkin said even once they had opened in May, pubs would need continue support through an extension of the VAT cut and Business Rates relief – as well as a beer duty cut for 12-24 months. "This support will need to be extended to brewers and supply chain partners who are relying on the timely reopening of pubs as they depend on them for trade."

Addressing how a consistent approach to easing lockdown restrictions could help avoid food waste, Paschalis Loucaides, UK managing director of food waste charity Too Good To Go said: “While today’s roadmap does not provide hospitality businesses with positive short term news, the fact is that this certainty will allow businesses to prepare effectively for reopening from mid-April. What is crucial however is that the government does not continue to move the goalposts at short notice after this point, as was the case more recently.

"This led to food being wasted on an astronomical scale across the whole supply chain, not to mention the economic burden this has imposed on businesses. Not only does wasted food and drink waste the money and resources that have gone into producing it, but it also causes irreparable damage to the environment. Having risen to every challenge so far, now is the time for food businesses to see the light at the end of the tunnel and for food waste to be prevented at every turn.”

Budget

Speaking in the House of Commons today (22 February), Johnson did, however, say: "... People may be concerned about what these changes mean for the various support packages for livelihoods, for people and for the economy, so I want to reassure the House: we will not pull the rug out. For the duration of the pandemic, the Government will continue to do whatever it takes to protect jobs and livelihoods across the UK and my right honourable friend the Chancellor will set out further details in the Budget next Wednesday."

He outlined the key dates when pandemic-related restrictions could be gradually eased. However, he cautioned the schedule would only be adhered to if progress was made as anticipated and it would be reassessed if there were setbacks.

He said lifting restrictions would inevitably lead to more deaths whenever it was done, because there would never be a COVID-free world. However, he went on: "We cannot persist indefinitely with restrictions that debilitate our economy, our physical and mental wellbeing and the life chances of our children.

'Cautious but irreversible'

"That is why it is so crucial that this roadmap be cautious but also irreversible. We're setting out on what I hope and believe is a one way road to freedom."

Johnson said the Government would start a review of how long social distancing and face masks should continue to be used; this would also be used to determine how long people should continue to work from home. A second review would look at when to resume international travel. This review would report recommendations by 12 April.

He said free testing kits for workplaces would continue to be made available until the end of June.

Related topics: COVID-19, Business Leaders

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