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Fri 19th Feb 2021 - Sunak to extend rates relief and furlough
Sunak to extend rates relief and furlough: The chancellor Rishi Sunak is set to extend two crucial lifelines to companies battered by ongoing covid restrictions by keeping the furlough scheme going until the summer and prolonging the business rates holiday for the retail, hospitality and leisure sectors. According to The FT in next month’s Budget the chancellor is expected to announce the continuation of business rates relief beyond the end of March, when it was due to expire. He will also keep subsidising employers’ wages in an attempt to prevent a surge in joblessness while the UK races to vaccinate its population. It follows a pledge by the Scottish government to keep similar business rates relief in place for another year. The report also said that the furlough scheme will be kept in place until the summer before being phased out. It comes as reports suggest Sunak will announce today that he is delaying a final report on a review of business rates – a key part of his promise to “level the playing field” between high street and online retailers. Sunak will argue that postponing the report, which will consider the case for an online sales tax, to the autumn will allow him to make decisions when the uncertainty caused by the pandemic has receded. A Treasury spokesman declined to comment.

One in five on furlough as scheme nears possible end: 20% of workers are on furlough with just over a month to go before the support is set to be withdrawn. According to The Times, the Office for National Statistics (ONS) found that one in five workers were on furlough in the two weeks to 7 January. This was up from 18% in the previous two-week period, but was lower than during the spring lockdown, when 30% of workers were on furlough in June. The figures suggest that businesses have weathered the latest lockdown better than the first, with fewer companies relying on the job retention scheme. Others made staff redundant so no longer require the support. Furloughing is due to expire at the end of April, but economists have called on the chancellor to extend the scheme until social distancing measures are lifted. Unemployment is expected to hit 7.5% after it is withdrawn. The ONS said that 47% of businesses had reported turnover below normal levels. Of this group, 12% said that their gross revenue had fallen by more than 50%. A small minority, 6%, said that their businesses were doing better than expected. The latest figures also show that 44% of businesses will run out of cash within six months. Another 4% had no cash reserves at all.

Gordon Ramsay tells Rishi Sunak more support for the sector is needed: Chef Gordon Ramsay has increased pressure on Rishi Sunak to extend the VAT holiday and furlough for struggling hospitality businesses at his Budget. Ramsay sat down with the Chancellor this week to warn the schemes have been a “massive boost” and “pivotal” to supporting restaurants, bars and pubs during the pandemic. Sunak slashed VAT for the pub and restaurant trade to 5% to help it survive the pandemic – but that measure is due to end on March 31. There are fears that he will not extend the measure as he attempts to fill the financial black-hole sparked by covid. The Michelin starred chef, who employs around 600 people in the UK and thousands more around the world, told Sunak that his interventions has been “instrumental in maintaining some positivity” across the hammered sector. Sunak has started a series of “In Conversation” meetings with industry leaders – to hear directly how he can help them fight the pandemic and put rocket boosters under Britain’s recovery. At their virtual meeting Ramsay said: “I think as a government, we’ve been supported better than any other country I know. And secondly, you’ve been precise, what you’ve said you’ve stood by and delivered. I think we’ve been given one of the most incredible support systems from the furlough scheme, which was instrumental in maintaining some positivity. I think you delivered beyond. But the downside for me is that we have lost some really good restaurants that were good, but sadly, there are going to be casualties.” Sunak boosted hopes he will do more to save the trade, by telling Ramsay: “Economically it’s incredibly important, but also it’s that connection with people in their communities. It just gives joy to people’s lives. It brings life to villages, towns across the country, and seeing that taken from us is incredibly sad and we have to recapture that again.”

Study finds 10pm curfew had no effect on the spread of the virus last autumn: England’s 10pm coronavirus curfew on pubs and restaurants did nothing to reduce the spread of the disease, a study has suggested. Scientists looked at data from nearly 4,000 Britons to measure the effect of various lockdown measures last summer and autumn. They found the curfew, introduced on September 24, had ‘no measurable effect’ on reducing the number of contacts people mingled with. The policy was heavily criticised by hospitality bosses who said it was yet another blow to one of the hardest-hit sectors during the pandemic. London Mayor Sadiq Khan even claimed at the time the curfew led to increased social mixing on the streets and on public transport after final orders. But the latest study by the London School of Hygiene and Tropical Medicine found there was no ‘appreciable effect’ either way. The team also reviewed how effective the Rule of Six, the Tier system, and work from home guidance was at reducing social contacts. The Rule of Six, introduced on 14 September, caused more than one third of people to reduce their number of close contacts. The impact of the tier system was found to be mixed, with tier one and two having little impact on the average number of contacts, but Tier 3 reducing contacts. With the 10pm rule, one quarter recorded a smaller number of social interactions, but nearly one fifth increased their contacts. Dr Christopher Jarvis, assistant professor at LSHTM and the lead author of the paper, said: “To put these changes in context, the full national lockdown in March reduced average daily contacts from an estimated 10.8 to 2.8 – a 74% reduction. In absolute terms, the changes following more recent restrictions were relatively small, this may indicate that restrictions were applied at a point when individuals had already lowered their contacts, and not that the restrictions did not have an effect.” The government has since admitted there was ‘no hard evidence’ behind its decision to go with the curfew. Sir Patrick Vallance, the chief scientific adviser, said in December it was a ‘policy decision’ designed to limit the amount of time people spent indoors together, where covid spreads most easily. UK Hospitality has submitted a document to the Prime Minister ahead of next week’s announcement, urging venues to be allowed to trade in all Tiers other than Tier 4, which is already considered, in everything but name, a full lockdown. UK Hospitality says the industry lost £72 billion in sales in 2020, its worst year on record, and is now approaching a period where venues have been closed nationally for more than half of the last 12 months.

NewRiver buys Sheffield retail and leisure estate: NewRiver, the parent company of pub operator Hawthorn, has announced the £41m acquisition of a retail and leisure estate in Sheffield City centre. The Moor benefits from its adjacency to Sheffield City Council’s £470 million ‘Heart of the City II’ regeneration project, which is delivering a dynamic and vibrant mixed-use district in the city centre that connects all neighbouring quarters. The project aims to generate 7,000 jobs. The Moor is the city’s primary retail and leisure destination. Mark Davies chief executive of Hawthorn and also a founder director of NewRiver, said: “NewRiver is a financially strong business with a fully unsecured balance sheet, and the business continues to be acquisitive when the right opportunities arise. With cash and available liquidity to the business, and additional funds available when required, we expect further acquisition opportunities this year, for both our community retail and community pub owning businesses. I’m really pleased to have got this transaction done and the priority remains over the next few days to get a viable and fair roadmap from our government so the great British pub sector can reopen in a safe and socially responsible way, in line with the conditions we worked to on the 4 July last year.”

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