Rishi Sunak Needs to Get His Skates on to Save as Many Restaurants as Possible

Chancellor Rishi Sunak is under further pressure to announce new coronavirus grants and financial support before the 2021 Budget, which is due on 3 March. The Confederation of British Industry (CBI) has urged the chancellor to announce a furlough scheme extension and business rates holiday extension as soon as possible, to avoid closed businesses like restaurants, pubs, cafes, and bars having to lay off workers to avoid closing or to cease operations entirely because they can’t make it to March.

“Our Covid-related business support asks are about moving now or soon, rather than waiting until March 3... business support needs to go in parallel with the tiering of restrictions,” said Tony Danker, the director-general of the CBI. “Sudden stops and cliff edges really don’t help and I don’t think anybody in government believes that we’re going to have a sudden opening up with the economy.” Its suggestions include extending the furlough scheme to summer and extending the current holiday on business rates by three months minimum.

Currently, the coronavirus furlough scheme runs out at the end of April; the business rates holiday ends at the end of March; and the lease forfeiture moratorium that protects restaurants from eviction ends at the same time. While Sunak announced new grants from £4,000 — £9,000 on 5 January, they are designed to address the impact of the most recent national coronavirus lockdown. With the government having repeatedly emphasised a “phased” easing of restrictions that will likely involve a return to the tier system under which restaurants and pubs can’t open until tier two, the current end dates for support are unlikely to be sufficient, even though tier restrictions bring their own — small — grants.

But what’s more pressing is that without advance notice of coming support, whether it be actual money or the ability to defer outgoings, restaurants, pubs, cafes, and bars will have to plan for a future in which they must assume nothing is forthcoming. That means cutting costs; that means laying off staff they can’t afford to keep on furlough; that means, if the numbers don’t add up, closing altogether. With spring/summer heralded as the point at which the vaccine is likely to bring businesses relief, having them needlessly close by delaying support would, to put it mildly, not go down well.

This bind fundamentally comes down to Sunak’s ideology, and that ideology does not include — as much as many in the sector might disagree — not caring about restaurants. The hundreds of millions spent on “Eat Out to Help Out,” the epidemiological wisdom of that policy notwithstanding, are testament to the Treasury’s understanding of the significance of hospitality to economic recovery. He introduced grants for restaurants in tier two, despite their being able to open. He has always pushed for as much of the economy to stay open as much as possible.

The problem is that he is deeply worried about national debt at a time when worrying about national debt is a very bad idea. The resultant last-minute extensions to support, the ill-fated Coronavirus Job Support Scheme that would have been disastrous for employers, and stratified opening policies for restaurants and pubs — including Scotch eggs and substantial meals — are manifestations of that ideology, in which he wants business to be open and also wants to spend as little as possible to avoid incurring further debts, not because he hates pints and pasta. This dovetails with Boris Johnson’s pathological attachment to Great British Freedom and goes against the need for effective public health restrictions, and creates the situation in which restaurants and pubs have trade throttled by tier rules and curfews, because there is a pandemic, but are “allowed to stay open” without recourse to financial support, because Sunak is overly mindful of debt. Financially illiterate reporting on “maxed out” national credit cards that analogises national finance to household expenditure didn’t help matters in the public eye.

This wasn’t great in 2020, when hospitality had to yo-yo from open to closed, lost money spent on staffing and supply chains with short-notice closures, and struggled with trickles of income coming in. But it’s worse in 2021, when the government is promising that vaccination offers a brighter future, that they just have to make it through this lockdown and some tiered restrictions, that there is something good on its way. That’s great. But if businesses don’t make it that far because the Treasury waits too long to get them there, all the sacrifices that the city’s hospitality businesses have made since March will have been for nothing.