CoronavirusLatest News

COMMENT: Are we meant to be open or not?

On Monday the Chancellor announced a raft of measures to be applauded and he gave a commitment to do “whatever it takes” to deal with the crisis we all find ourselves in.

Businesses across the country are reeling, and that sort of reassurance was needed, but the devil is in the detail. Especially as the hospitality sector, the UK’s third largest industry, employing some 3.2 million people, was in effect thrown under a very fast-moving bus on Monday night.

But now more than at any time before we all really need some serious clarity.

As a sector, are we meant to be open or not? We find ourselves stuck in a Dante-esque limbo where we need to trade to pay bills and support our staff, whilst at the same time we are asked to play our part in being socially responsible to help prevent the spread of Covid-19.

Whilst we appreciate the 12-month rate holiday, which is in many cases only around 5% of monthly business costs, we need immediate cash flow to keep our staff in jobs.

Businesses need liquidity to meet their costs, and this is talked about constantly, which is why increasing grants for our very smallest businesses from £3k up to £10k is commendable, as is the newly announced grant aid for business with a rateable value of under £51k of up to £25k.

But there the levelling up ceases it seems, which is why I urge the government to examine the need for immediately available cash grants across industry for businesses with a rateable value of more than £51k to prevent our business landscape changing forever.

There’s another conundrum or two attached to this and it deeply troubles me as a responsible business owner.

I’m pleased members of my team who own their own homes will be able to access a three-month mortgage holiday should they require but there are more pressing concerns when it comes to other members of my team.

I have staff who live in on-site accommodation (which is common across rural Britain), and should they lose their jobs because of business closure, they could potentially lose their home too. I would not in good conscience see them on the street, and I would do absolutely everything in my power to keep a roof over their heads but what is the government going to do to help me in that endeavour?

Unfortunately, there’s another related question, which pertains to members of my team who live in rented accommodation, just like many of their colleagues up and down the UK. The question is simple and has not been answered thus far – how will those in rented accommodation be supported should they lose their jobs to ensure that landlords do not throw them out on the streets?

I understand the need for a gradual and measured response but the stark reality is that many hospitality businesses could go under by the end of next week and we have a duty of care to our teams to support them as much as possible and get answers for those loyal people who have supported our businesses.

Access to loans alleviates some of the short term issues we as businesses face but the fact of the matter is that we know nothing of the conditions to be imposed, how much we might need to borrow (because we don’t know the time frames involved), and is it worth carrying on when we will have to pay this new borrowing back alongside our existing borrowing, effectively putting us out of business anyway?

In the current circumstances wouldn’t it be prudent to allow for a temporary relaxation of the Pay As You Earn (PAYE) rules for businesses? Primarily to allow businesses to continue to pay their staff something rather than be forced to lay them off after a period of time because we can’t meet our tax and national insurance obligations, after all isn’t providing something better than nothing?

Ultimately if we are stopped from trading and have to resort to taking out loans to see us through many hospitality businesses will never recover. They will perpetually be financing the loans taken out to survive the coronavirus period and certainly won’t be in a position to recoup the lost revenue or for that matter trade in the winter months. Without some real support, the hospitality industry is going to fare very badly in the medium to long term, with many of its businesses suffering adversely.

We are all facing a very stark reality and we will all have to see what happens next, but I for one would like it to be on a level playing field for businesses of all sizes across the country.


Jamie Shail is the owner of Rothay Manor, Ambleside, Cumbria.

Back to top button