Julian presses Treasury Ministers on special support for hospitality businesses under new 3-tier covid restrictions
October 14, 2020
Julian yesterday pushed Treasury Ministers on providing targeted support for businesses that could suffer a significant loss of trade without benefiting from the enhanced government support for businesses that have to close altogether, under the new ‘3 tier’ plan to contain rising coronavirus cases.
To control Britain’s share of the ongoing Europe-wide surge in covid cases, on Monday the government announced a new 3 tier plan to clamp down on the virus, while allowing as much of normal life as possible to function, avoiding return to national lockdown, and financially supporting businesses forced to close due to local restrictions.
The ‘medium’ alert (tier 1) restrictions, covering most of the country, are the current national rules and guidelines, including the ‘rule of 6’, office employees working from home wherever possible, and 10pm curfew closing for hospitality venues. ‘High’ alert (tier 2) is the next level up, and is meant to reduce household-to-household covid transmission, with all indoor mixing between different households prohibited. Above this, ‘very high’ tier 3 restrictions will be applied to areas where the virus is rapidly spreading, and the local health service could be placed under intolerable pressure without tough measures. Tier 3 restrictions go even further in banning household interactions, including in private gardens, ticketed outdoor leisure venues, with non-essential travel advised against, and all pubs and bars not serving substantial meals required to close.
In order to sustain businesses required to close under tier 3, special financial measures have been put in place, with grants of up to £3000, and government covering two-thirds of the wages of employees.
Julian is concerned that in the unfortunate event York is put into tier 2 (‘high’ alert) from its current tier 1 (‘medium’ alert) position a number of York businesses could find themselves in a grey area in tier 2 between full, government-financed closure under tier 3, and being able to trade more normally. However, the risk of York going into further restrictions should not be exaggerated, with serious measures being taken across the city to control the virus surge, and a high rate of testing utilising the new Wentworth Way walk-in test centre. York University is also working successfully to contain its covid cases within the university campus.
Even just tier 2 measures would reduce hospitality footfall massively by preventing households meeting, even with social distancing, in eateries and pubs. This could mean enterprises sustaining big losses of trade, on top of the huge losses from current restricted capacity, and during the national lockdown, without sufficient support to keep them viable over time and sustain jobs.
In the House of Commons, Julian asked Minister to commit to urgently reviewing what further targeted support could be provided to businesses likely to sustain big falls in trade under tier 2 restrictions, stressing that existing restrictions were already reducing trade for venues by 40-60%. Julian’s enquiry was a precaution if the city does move towards needing tighter restrictions, not a prediction this is likely to happen.
Responding for the Treasury, the Chancellor’s deputy, Chief Secretary to the Treasury Stephen Barclay, said: “The most important thing for businesses in tier 2 is we’re able to control the virus, that is why the govt is investing as heavily as we are in track and trace, over £ 12 billion so far, and enabling those businesses in tier 2 to retain their staff, which again is what the winter plan and the jobs support package is doing, so the govt has made targeted interventions in support of those businesses, in tier 2, but we need to balance it against the wider fiscal position that we face.”
After leaving the Commons, Julian said: “I am hopeful that York can avoid going into ‘very high’ alert tier 3 restrictions, and even in that terrible event, I am reassured that targeted government funding is there to keep York’s many hospitality businesses and jobs alive, with business and wage payment grants. I also believe York’s rise in cases is being well-controlled, and may soon peak and come down, so we should not assume our city will rise up the tiers.
However, I have significant concerns about the level of support in this unfortunate event, which is why I thought it was essential to raise this with Treasury Ministers as a precaution.
I appreciated the Chief Secretary’s reiteration that businesses in the grey area of ‘high’ alert tier 2 are able to access some government support, with government paying a share of wages to keep in work those put on reduced hours due to depressed trade under the new Job Support Scheme, and extending the deadline for government emergency business loan applications to the end of November.
However, I remain concerned whether this will be enough to protect businesses against the big loss in footfall that would come with the ban on households meeting indoors under tier 2 restrictions. I will therefore continue to collect feedback from local businesses, and press the government for stronger guarantees wherever necessary. In the event York does face a move to tier 2 restrictions, I will be vocal in ensuring the government provide the support our city’s hospitality industry needs to survive and rebuild.”