Sunak “holding package” of support for business criticised by Labour and unions

Sienna Rodgers
© Iryna Inshyna/Shutterstock.com

The new package of support for restaurants, pubs and bars unveiled by Rishi Sunak today amid Covid disruption has been criticised by the Labour Party as “a holding package from a government caught in a holding position”.

The Chancellor has revealed that hospitality and leisure businesses in England will be eligible for one-off grants of up to £6,000 per premises, and that the government will cover the cost of statutory sick pay for Covid-related absences for small- and medium-sized UK employers.

Sunak also announced that, as part of the £1bn worth of support, £30m of further funding will be made available via the ‘culture recovery fund’ to support cultural organisations in England, such as such as theatres, orchestras and museums, until March 2022.

The package of support means the devolved administrations will receive around £150m of funding through the Barnett formula, which means around £80m for the Scottish government, £50m for the Welsh Labour government and £25m for the Northern Ireland executive.

Reacting to the measures, Labour’s Rachel Reeves said the government was “dragged kicking and screaming here”. Pat McFadden, the new Shadow Chief Secretary to the Treasury, said: “This is a holding package from a government caught in a holding position.

“The Prime Minister is a prisoner of divisions inside his party and within the cabinet about whether any further measures are needed and whether they will get past Tory backbenchers. That is not the way that crucial public health decisions should be taken.”

The TUC highlighted that the measures are “not conditional on employers keeping workers on and covering their wages” and “do nothing to fix the gaping holes in our sick pay system”, demanding: “The Chancellor must go back to the drawing board.”

General secretary Frances O’Grady said: “We need a new targeted furlough scheme that covers at least 80% of workers’ wages, and that guarantees that no-one furloughed is paid less than the minimum wage. And we need decent sick pay – paid at the real living wage – available to everyone.”

YouGov polling commissioned by the TUC and conducted over the weekend found that 77% of people believe the government should reintroduce furlough for at least some industries if new public health restrictions force businesses to close.

Unite the Union pointed out that the new hospitality and leisure package could mean as little as £50 per worker for an average four-star hotel and concluded that it will be insufficient to see the sector through the latest wave of the pandemic.

General secretary Sharon Graham said: “It is unacceptable that thousands of young workers face such awful uncertainty – they need to know now that they can pay their rent and that they still have a job. Today’s measures do not guarantee either. It looks like we are in ‘too little too late territory’ here.”

Dave Turnbull, Unite national officer for the hospitality sector, called for “more support to pay workers’ wages”, stressing that, for many, “the lockdown by stealth has wiped out this season and the future looks extremely uncertain”.

Unite hospitality industrial organiser Bryan Simpson added: “We are already aware of workers being sent home without pay as customers stay at home. This is an intolerable position to put workers in. Providing an average of £50 per worker is not going to stabilise this sector.”

Manuel Cortes, leader of the transport union TSSA, said of Sunak: “Frankly, it would have been better if he hadn’t bothered coming back from California as what he has said today does not get anywhere close to what is needed.

“Our travel trade, and now our hospitality sector, are being badly hit… What we needed to hear from Sunak was that the government would be reintroducing the furlough scheme for workers within all areas of our economy which Omicron is badly hurting.”

The Resolution Foundation’s Torsten Bell similarly criticised the package for ignoring workers, saying: “This is the de minimis repeating of parts of the approach from last lockdown earlier in 2021 but with one HUGE difference: no furlough scheme.”

Bell added that there is now “nothing to help workers where hours are cut or jobs lost, or to [incentivise] firms not to do those things”. He also noted, as many others have, that grants up to £6,000 per premises would equate to around “one good day’s taking” for many hospitality businesses.

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