BRITAIN’S pubs won’t survive the summer if they are forced to pay 20 per cent of employees’ wages and stay shut, hospitality bosses have warned the Chancellor.
As Rishi Sunak prepares to announce cuts to the furlough scheme, chief exec of British Beer and Pub Association Emma McClarkin said many pubs may never reopen their doors.
Ms McClarkin told HOAR: “The pandemic has had a devastating effect on the pub sector, we’ve had no money coming in, no trade at all from March.
“So we are surviving and clinging on with the furlough scheme grants they have given us – but to be in the position where pubs remain closed but have to pay (contributions to staff), it is madness.
“(Pubs) can’t do that without significant job losses and redundancies being made or those pubs just closing their doors.”
Ms McClarkin said a survey of their 20,000 members showed 40 per cent of them would not be able to survive until September without significant Government help.
“(The Chancellor) needs to recognise that if our pubs remain closed even after July 4th, they are are not going to be able to (top up employee’s pay), they are going to need to be maintained on 80 per cent.
“There can be no reduction on that because they’ve had nothing coming in.”
Mr Sunak has already extended the scheme, which pays furloughed employees 80 per cent of their wage up to £2,500, until October.
But he is expected to say it will continue with reduced levels of support , asking employers to pay 20 per cent of staff wages, while the Government foots the last 60 per cent of the bill.
The changes would be introduced from August, with pubs being able to open from July at the earliest – but possibly not until even later in the year.
Ms McClarkin added even if pubs were able to reopen, keeping the social distancing rule at 2 metres would mean only a third of Britain’s boozer would be able to start serving again – as many as 37,000 would have to stay closed.
If the 2 metre rule was halved – that would allow 75 per cent of Britain’s pubs to reopen.
She said: “If we are being asked to pay significant contributions, we would hope our business would be able to open.
“The focus has to be getting out businesses to open by July 4th, (reducing the 2 metre rule) at the same time would increase trade because you’re opening up more of the sector.”
National online business manager and Real Business Rescue Shaun Barton warned pubs and restaurants would be facing the pandemic alone if Government support was wound down.
He said: “Even a 20 per cent salary contribution from these companies may be too much for many small businesses
“Already 39% of all four-year-old bars and restaurants are in distress.
“They are becoming increasingly more anxious about news allowing them to fully reopen and they know that they simply won’t be able to survive on less than full capacity.
“These bars and restaurants are part of the massive night-time economy that supports 8% of employment in the UK and generating £66bn of revenue a year.
“This pandemic is by no means over; if support is withdrawn and these businesses are left to face it alone, there are millions of jobs and promising businesses resting on this decision.”
Ms McClarkin warned even if pubs reopen by July, it could take as long as a year for the sector to see anywhere near normal trading.
“It’s going to take a long time for trade to recover, we’re going to have to get (extra government support) to make sure there aren’t significant job losses.
“We’re not going to need all staff because of reduced capacity, we are going to need to build consumer confidence for them to want to come and and spend time (in pubs).”
Ms McClarkin said for pubs to survive the furlough scheme would need to be applied in full until October for the hospitality sector and it begin to be tapered off at the end of the year.
Mr Sunak is expected to announce the changes to the furlough scheme at the daily press briefing this evening.
The Office for Budget Responsibility has estimated the total cost of the scheme will come to £80 billion.