clock menu more-arrow no yes mobile

Filed under:

The Government Will Cover 80 Percent of Restaurant Worker Wages Until End of April

Chancellor Rishi Sunak announces another month of furlough

Chancellor Of The Exchequer Rishi Sunak Announces One-Year Spending Review
Rishi Sunak
David Cliff/NurPhoto via Getty Images

Chancellor Rishi Sunak has announced that the government will again extend its furlough scheme — the Coronavirus Job Retention Scheme (CJRS) — by one month, until the end of April 2021. It means that 80 percent of the wages of London restaurant workers who’ve been unable to work during the pandemic will have been paid by the state for a year.

The timing of the extension indicates that the government is not expecting businesses to have returned to pre-pandemic levels of trading before Easter — when it hopes to have entered the roll-out phase of the COVID-19 vaccine across the U.K. It confirms for restaurants that a hard and customer-less Christmas will precede a similarly barren and uncertain first quarter of the new year.

It is based on this that the government is hoping to offer some level of support until the return of some semblance of normal trading. Last week, it extended legal protections against evictions for commercial tenants until the end of March 2021, which it hopes will give the likes of restaurant owners some breathing space with landlords to whom the owe monies accumulated throughout the pandemic.

“We know the premium businesses place on certainty, so it is right that we enable them to plan ahead regardless of the path the virus takes, which is why we’re providing certainty and clarity by extending this support,” the Chancellor said. Restaurants, many of whose owners feel anything but a sense of certainty heading into 2021, may contend the Chancellor’s definition of “certainty” and “clarity.”

While the furlough scheme has protected jobs (9.6 million, according to government data), it has not prevented hundreds of thousands of roles being made redundant in the hospitality sector, which has been hit hard by the periodic lockdowns and constant restrictions. The scheme has also had its limitations for workers in hospitality, whose monthly wages are often comprised of a base salary and of service charges and tips, the latter of which were not included in the government’s calculations.

Sunak also confirmed that the next Budget will be announced on 3 March 2021, which will “set out the next phase of the plan to tackle the virus and protect jobs.” The Treasury also confirmed, “in a move to ensure firms can access the support they need through continuing economic disruption” that it would extend the government-guaranteed Covid-19 business loan schemes until the end of March.

Restaurants, many of which are now closed until the new year, at what is normally the busiest and most profitable time of the year, have said they need more than furlough and loans. They need clear communication and time to plan before they open and close; they have called for an extension to the VAT cut; an extension of the business rates holiday; and, for many, whose landlords have proved uncompromising on debt, a national solution to the rent crisis. For many, the latter is more important than any vaccine.

Sunak says he’s providing certainty and clarity. Restaurants sense neither.