Old Mill: Sunak needs longer-term job support strategy
Chancellor Rishi Sunak has unveiled additional government support measures under his Winter Economic Plan, but Old Mill has suggested that radical changes to taxation are still needed in the long-term.
This latest support package for businesses addresses a number of concerns, reducing employer contributions and expanding business grants to cover those businesses in badly affected sectors like hospitality in high-alert level areas.
Grants for the self-employed have been doubled to 40% of previous earnings in response to recent criticism.
A typical full-time employee in hospitality is paid an average of £1,100 per month, under the jobs support scheme for open businesses, they will still take home at least £807 a month; all the employer needs to pay is a total of £283 a month, or just £70 a week, and the government will pay the rest.
Phil Mills, head of food and drink at Old Mill, said: “Whilst we welcome any improvement this is the third statement from Mr Sunak in less than a month which suggests perhaps that the government is playing catch up to what is still a pretty dire situation for most, if not all, hospitality businesses.
“With the tightening of lockdown restrictions there is a lot of confusion which has decimated trade for pubs and restaurants to the extent that many are not currently viable so it remains to be seen whether it’s enough to keep people in jobs.
“That said, the direction of travel means that although things will remain tough for many food and drink businesses, these new measures should make it more worthwhile financially for employers to retain staff which will be critical for keeping unemployment down in the sector over the coming months.
“With the uncertainty set to continue, there needs to be a longer term strategic plan to secure the future of the industry that may require radical changes to the VAT and the tax system applicable in the sector.”