Labour calls on Govt to use the £2 billion cash handed back by supermarkets to help hard-hit high street businesses

Wednesday, 16 December 2020 22:30

Labour is calling on the government to save pubs and businesses in the hospitality sector suffering due to inadequate support from the government, as almost 20,000 extra businesses will be forced to close from today. Labour has urged the government to use a portion of the £2 billion in business rate relief that supermarkets have pledged to return to the Treasury to establish a Hospitality and High Streets Fightback Fund targeted at those firms that have been hardest hit...Request free trial

Labour has urged the government to use a portion of the £2 billion in business rate relief that supermarkets have pledged to return to the Treasury to establish a Hospitality and High Streets Fightback Fund targeted at those firms that have been hardest hit throughout the crisis. Labour is calling for the remainder to be used to immediately support self-employed people excluded from support throughout this crisis.

The party is also calling for reform of the unfair Additional Restrictions Grant so that funding is allocated based on which Tier a local area is in and how long they have been in it, to reflect business need.

New figures have revealed that from today (Wednesday 16^th December) when new restrictions come into force across large parts of the country, an estimated 77,000 pubs, cafes, restaurants and other hospitality businesses will be closed in Tiers 2 and 3, including over 80 per-cent of all pubs in England in places like Blaby, Bolsover, Bromley, Broxbourne, and Burnley. 8 out of 10 closed businesses in Tiers 2 or 3 after today will be receiving less support than in the March lockdown.

Unless the government acts, the heart and soul of many communities will be ripped away if more is not done to support businesses facing a cash crisis in the crucial Christmas period when takings tide over pubs through the Winter months.

Lucy Powell MP, Labour’s Shadow Business and Consumers Minister, said:

“This government’s irresponsible choices have left the UK with the worst recession of major economies, and tens of thousands of businesses are still in purgatory. Without adequate business support pubs, cafes and restaurants around the country will go bust, taking with them jobs, suppliers and the life’s work of so many.

“The money being repaid by the big supermarkets should be set aside now to stop this wave of insolvencies and support our hardest-hit businesses, like pubs and hospitality firms, as well as people who’ve gone without any extra support for nine months now.”

Ends

Notes to Editors

Investigations by the House of Commons library for Lucy Powell MP show the number of hospitality business premises by special category (bars, cafes, restaurants, hotels and holiday accommodation, nightclubs and discotheques, pubs and restaurants), in England, regionally and in each local area by rateable value.

Using this data, Labour has estimated the number of businesses facing restrictions because of the Tiered system. Over 18,000 businesses in London, Essex and Hertfordshire will close when they move into Tier 3 on Wednesday 16^th. 77,000 businesses including 11,000 wet-led pubs that don’t serve food, will be closed in Tier 2 and 3 areas after Wednesday.

This table also shows the number of businesses getting less support than in the March lockdown when on a monthly equivalent grants were worth a half to a third more for businesses with a rateable value less than £51,000. 8 out of 10 (79 per-cent) closed businesses in Tiers 2 or 3 after December 16^th will be receiving less support than in the March lockdown.

Tiers after Monday 14th announcements, being implemented on Wednesday 16th
Rateable properties¹, by rateable value, by special category,^A by local authority, as at 31 March 2020
Tier	AREA	Attribute	Less than 12K	12k to 15k	Less than 15k	15k to 51k	51k+	all
1	England	All hospitality	11,660	340	12,000	840	320	13,190
2	England	All hospitality	49500	3910	53,410	15020	7680	76200
3	England	All hospitality	29,220	4230	33,450	18520	13830	66,080
2		Wet led pubs*	3241	944	4,185	4851	2428	11293
Closed businesses T2 and T3 from 16/12			32,461	5174	37,635	23371	16,258	77,373
*BBPA estimates that 66 percent of pubs are wet let led and do not serve food so would be closed.
Tier 2 to 3 16/12		All hospitality *	3080	1,210	4290	6,710	7420	18500
*not including nightclubs which are already closed

VOA. Non-domestic rating: stock of properties including business floorspace, 2020

https://www.gov.uk/government/news/london-south-essex-and-south-hertfordshire-to-move-to-tier-3-restrictions

1 Rateable property (also known as hereditament) - A unit of property that is, or may become, liable to non-domestic rating and thus

appears in a rating list.

A Special category - These are the most detailed description of a property and shows the nature of the use of the rateable property.

Counts are rounded to the nearest 10 with counts of 0 being reported as 0 and counts of fewer than 5 reported as negligible and denoted by '-'

The plight of pubs

This data also shows the existential threat to pubs with 83 per-cent of pubs in England closed across the country in Tiers 2 and 3.

Tier	Attribute	Less than 12K	12k to 15k	Less than 15k	15k to 51k	51k+	all
All pub properties in England		11,480	3,100	14,580	15,410	9,080	38,700
1	All pubs	210	60	270	330	140	750
2	All pubs	4910	1430	6,340	7350	3680	17110
2	Wet led pubs	3241	944	4,185	4851	2428	11293
3	All pubs	6,360	1610	7,970	7,730	5260	20,840
All closed pubs in Tier 2 and 3		9601	2554	12,155	12581	7688	32133
Pubs moving 2 to 3		580	210	790	1,760	2080	4,630

Labour’s pubs and hospitality proposal – A revamped Hospitality and High Street Fightback Fund

Labour has argued that the government should use the money that the UK’s largest supermarkets are returning to the exchequer to support hospitality businesses and excluded individuals that have received inadequate government support so far and could struggle to survive the winter. There is currently more than £2 billion (£2.147 billion) in this fund including:

£585 million returned from Tesco; £498 million from Sainsburys; £340 million from Asda; £274 million from Morrisons; £130 million from Kingfisher (owners of B&Q); £109 million from Aldi; £100 million from Lidl; around £80 million from B&M; Pets at Home returned £28.9 million; £2.1 million from Whole Foods;

Labour has argued this funding should be used to:

Boost the support available for businesses in Tier 2 and 3 areas, such as in the hard-hit hospitality sector, ending the unfairness of the current system
Fix the gaping holes in the support for the self-employed, which has left many people excluded from any government support whatsoever

Labour has also argued that the one-off £20-a-head funding handed out under the Additional Restrictions Grant is unfair and should be redesigned so that funding is allocated based on which Tier a local area is in and how long they have been in it.

Labour is also calling on the government to use some of that £2 billion to help those people and businesses who have been excluded from government support schemes since the start of the crisis and have now been without additional help for 9 months.

Business support during the Coronavirus crisis

On 17March, the government announced grant funding of £25,000 for retail, hospitality and leisure businesses operating from smaller premises, with a rateable value over £15,000 and below £51,000. Smaller grants of £10,000 were available for small businesses.

On 9 October, the Chancellor announced changes to the Local Restrictions Support Grant. The grants are available for businesses in Tier 3 Local Lockdowns. Businesses are eligible for the scheme after two weeks of closure and grants will be awarded to business closed as a result of national restrictions as well as local ones. The grants criteria are as follows:

£1,334 per month for businesses whose property has a rateable value of below £15,000.
£2,000 per month for those whose property has a rateable value of £15,000 or more but less than £51,000.
£3,000 for firms whose property has a rateable value of £51,000 or more.

Business support grant comparison March lockdown and Tiered lockdowns

In the March lockdown retail, hospitality and leisure businesses received a grant of £25,000. This was one-off support which lasted until businesses were allowed to reopen 15 weeks later. It equated to £1666.67 per week for businesses below £51,000 and above £15,000 rateable value. Small businesses could claim £10,000 which equated to £666 per week for the same period.
Under the new scheme, retail, hospitality and leisure businesses whose property has a rateable value of £15,000 or more but less than £51,000 (the majority of RHL businesses) can access £2000 every 4 weeks they are closed. This equates to £500 per week. Businesses with a rateable value of less than £15,000 can access £1333 every 4 weeks they are closed equivalent to £333 per week.