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UK heading towards mass redundancies concealed by furloughing scheme

The furloughing scheme is concealing the true picture of unemployment in the UK, providing financial support to employees whilst their employers facing closure. The #RaiseTheBar campaign believes adjustments to the furloughing scheme have created an unlevel playing field of support meaning businesses are missing out on vital funds to stay afloat whilst their employees are able to remain financially supported on furlough.
Fears risk of mass redundancies contradicts aim of furlough scheme
  • 8.7 million people across the UK currently furloughed
  • £300bn is the cost to the Exchequer of the coronavirus this year
  • 54,6382 businesses across England and Wales are currently unable to access the £25,000 Retail, Hospitality and Leisure Grant [RHLG] according the #RaiseTheBar campaign
  • Visit www.raisethebarcampaign.co.uk for more information
The situation is likely to reach tipping point this month, with the next quarterly rent due on Wednesday 24 June set to force businesses to close with overheads and the cost of re-opening depleting cash reserves.
 
Matthew Sims, CEO, Croydon BID and co-founder of #RaiseTheBar campaign said, “The Government is in danger of pushing businesses to the brink of the abyss and in turn leaving businesses with no choice but to make serious decisions regarding their future operation, leading to redundancies and even closure. If this happens, the positive work of the Job Retention Scheme would have been short-lived, leaving the
country, long term in a far worse position and having spent millions on financial aid supporting the employee, but ignoring the employer.”
 
Ian Egerton, owner of The Stress Exchange hair and beauty salon in London and President of the National Hair & Beauty Federation said, “By ignoring businesses such as mine with business rates just over the 51,000 threshold, the Government is simply kicking the can down the road. Not only am I not entitled to financial grants, I also have no income at all, yet quarterly rents are still expected to be paid at the end of this month. This is not sustainable. Businesses will fold and people will lose their jobs. A VAT delay from the last quarter does not help as ultimately the money still has to be paid back. I do not expect the government to fund failing businesses, however with no means of income and outgoings still expected, they urgently need a common sense approach to fairness.”
 
Night Czar, Amy Lamé said: “Whilst we welcome the Government extension of the job retention scheme, this crisis will require long-term economic intervention from the Government. Bars, pubs and clubs remain in lockdown without the levels of cashflow they need to pay wages, National Insurance and pension contributions with their future looking bleak to impossible. Without more help from the Government, they will
be forced into widespread redundancies, which would have a further negative impact on our economy, culture and society."
 
Andrew Taylor, Mr Fox pub Croydon and co-founder of #RaiseTheBar campaign, “Now is the time for the Government to provide the same level of financial support to employers as well as employees. With over 13 of my staff on furlough and the cost of re-opening my pub in excess of £8,000 with not a penny made over the past 10 weeks I struggle to understand how the Government doesn’t see my lack of cash flow as a problem that needs solving. Noone wants to make redundancies and no one wants to create another financial pressure, but it seems like the elephant in the room is we have millions of people unemployed who are being given a lifeline to nowhere.”
 
Claire Alexander, owner The Ebrington Arms and The Killingworth Castle in the Cotswolds [the Good Pub Guide Gloucestershire dining pub of the year 2019],”Having received no financial grants simply because of our rateable value being over the £51k threshold, the future of the business and the staff we employ is now seriously at risk. The furlough scheme may have maintained our staff to date but as business owners we face stark and challenging decisions on whether we can survive. Across our two pubs, we employ 45 dedicated staff, each one as committed as the other to our joint success. However, without the financial support from Government, through the grant system, we will have little choice but to make redundancies, contradicting the sole purpose of the furlough scheme. As it stands, the job retention scheme offers a short-term solution, costing millions to the tax payer, without considering how to support the sustainability of businesses like ours, that employ them.”
 
About #RaiseTheBar
 
The #RaiseTheBar campaign believes access to the £25,000 Retail, Hospitality and Leisure Grant [RHLG] will enable businesses to mitigate significant stock losses and cashflow challenges, including rent, that wage subsidies do not address. The #RaiseTheBar campaign, launched on 21 April 2020, is calling on the Government to raise the arbitrary £51,000 business rates threshold cap to £150,000, allowing over
54,638 businesses in these sectors the chance to survive.
 
As part of the RHLG guidance, only those in the retail, hospitality, leisure and assembly sectors with a business rates value of up to £51,000 can access the vital grant, leaving tens of thousands of businesses stranded. The #RaiseTheBar campaign estimates a maximum of £1.365bn in Government support is needed to enable the RHLG grant to support all 54,638 businesses falling within a business rates threshold of £51,000 to £150,000.
 
Case studies of businesses across England and Wales are available upon request for quotes and interviews. They include pubs, restaurants, shops and Business Improvement Districts.
 
NOTES TO EDITORS
The #RaiseTheBar campaign was founded by Croydon Business Improvement District and Mr Fox pub in Croydon. The campaign launched on 21 April with an open letter to Rt. Hon. Alok Sharma MP Secretary of State for Business, Energy and Industrial Strategy calling for the business rates threshold requirement in the Retail, Hospitality and Leisure Grant to be increased from £51,000 to £150,000 to save tens of thousands of retail, leisure and hospitality businesses from going under. The #RaiseTheBar campaign continues to explore alternative means of support for those businesses currently unable to access the £25,000 grant.
 
The #RaiseTheBar campaign launched a Change.org petition on Thursday 23 April and is calling on the public to sign the petition to help save the nation’s High Streets. The campaign has secured cross-party support including:
 
  • 86 Conservative MPs wrote to the Chancellor on Friday 1 May, in an open letter calling for the business rates threshold to be increased
  • The Shadow Chancellor Rt. Hon. Anneliese Dodds MP has written to the Chancellor of the Exchequer Rt. Hon. Rishi Sunak MP, to bring to his attention the #RaiseTheBar campaign and the urgent need to raise the threshold above £51,000 due to businesses operating in high-cost areas
  • Rt. Hon. Matt Hancock MP, Secretary of State for Health and Social Care, committed to discuss the need to increase the business rates threshold with the Chancellor following a question from The Sheffield Star in the daily Government briefing on Monday 27 April
  • Rt. Hon. Lucy Powell MP for Manchester Central called for the business rates threshold to be increased in Prime Minister’s Questions on Wednesday 22 April Rt. Hon. Dominic Raab MP for Esher and Walton has passed the request onto the Treasury following local concern
  • Website: www.raisethebarcampaign.co.uk
  • Twitter: @RaiseTheBarUK
  • Facebook: @RaiseTheBarUK
  • Instagram: @raisethebarcampaign
  • The maximum support of £1.365 billion assumes all 54,368 businesses would each receive grant of £25,000
Clarification on data referenced:
1. 8 weeks is calculated by the number of weeks until the next rent quarter [24 June 2020] from w/c 4 May 2020 - https://www.gdlaw.co.uk/site/blog/sectors-blog/realestate-blog/rent-paya...
2. The maximum support of £1.365 billion is calculated as follows: RHLG grant £25,000 x 54,368 businesses = £1.365billion (upper limit assuming state aid is waived)
3. Breakdown of 54,638 businesses unable to access the RHLG grant falling within the rateable value threshold of £51,000 to £150,000:
4a. 48,967 shops [including e.g. cafes, restaurants, pubs, bars, galleries and coffee shops 2,888 hotels, guest and boarding houses, holiday homes and caravan parks
b. 2,520 sports and leisure facilities [including e.g. gyms, museums, nightclubs and theatres]
c. 144 assembly premises [including e.g. public halls and clubhouses]
d. 119 cinemas
4. The data included in the press release has been provided by property consultants Gerald Eve, based on searches of the Valuation Office Agency’s rating list of all properties in England and Wales, updated as at 29 April 2020.
5. The £25,000 RHLG grant is available for each property which meets the qualifying criteria and therefore a multi-site occupier can potentially receive multiple grants. The Government on this occasion has stated that this scheme is subject to the new Covid19 EU State Aid rules limiting grant to a maximum of €800,000, or a maximum of about 28 grants each of £25k

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