Two weeks ago, this column discussed the current situation regarding the introduction of fines imposed by the Welsh Government for not working at home and the impact on mental health for some individuals through the legal imposition of this approach.
Condemned by both businesses and the trade unions, such a draconian step seemed to be out of step with the way the vast majority of the population had previously complied voluntarily when asked to follow advice and guidance regarding Covid-19.
Over the last fortnight, other restrictions imposed by the Welsh Government have been in the news most notably the fifty person limit for community sports events, the closure of nightclubs and the rule that only a maximum of six people can meet in pubs and restaurants with table service being a requirement.
As the democratically elected administration, the Welsh Government can introduce new regulations as long as they are scrutinised and then backed by the Senedd. However, the public also expects transparency over such decisions if they are impacting on everyday lives.
Unfortunately, it would seem that despite promising to publish details of the evidence behind the decisions to impose these restrictions on business, nothing specific has been forthcoming.
Indeed, the Technical Advisory Cell which provides the scientific and technical advice to support the Welsh Government noted before Christmas that whilst the closure of nightclubs, face coverings in all indoor public places and limiting gatherings to six people can reduce the size of any peak, they will likely have only relatively little effect over the course of an Omicron wave if used in isolation without more stringent interventions. A similar opinion was also recently given by Scotland’s national clinical director about the impact of similar restrictions there.
Having made the decision to impose restrictions on the hospitality industry, the Welsh Government introduced £120m of financial support to compensate businesses although given the sharp decline in customers since the new laws came into play on Boxing Day, many will wonder whether this will have any material effect on the substantial loss of trade suffered as a result.
Not surprisingly, some have expressed concern that the formula for distributing this funding from the so-called Economic Resilience Fund makes no sense whatsoever, as has been the case during much of the response to the lockdown.
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For example, the grant is distributed according to the numbers of employees that each business has. This means that if you are a pub, restaurant or cafe that has been able to remain open and employ four people in your business, it’s £1,250 per employee but if you employ 20 people in your business, you get £375 per employee.
So essentially the bigger the business, and naturally the bigger the overheads, the less funding to deal with these new restrictions.
Given that staff costs can be the biggest expense to any firm, this simply does not make sense at all especially at a time when pubs and restaurants are on record as saying that the ‘table of six’ rules means that they have to have more staff in work to deal with customers.
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I have no idea who came up with this formula, but it would have been fairer to have calculated this differently through examining, for example, the minimum cost per employee with a potential limit on the maximum grant per firm.
In addition, firms need to be VAT registered and have a minimum turnover of £85,000 to obtain the grant which means that the vast majority of Welsh businesses are automatically disqualified from any support.
Given this, the question is whether officials discussed this approach with representatives of the hospitality industry to understand their needs and how best they could be supported?
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From talking to many in the sector, that doesn’t seem to be the case yet again and one of the most depressing features of the Covid pandemic has been the lack of consultation with businesses here in Wales on how to best support them whilst keeping communities safe.
As a result, businesses have yet to be informed by the Welsh Government why these specific measures have been brought in.
This is despite a key recommendation from the Technical Advisory Cell that it should provide “an explanation of what is expected of people, what each intervention is expected to achieve and why it is scientifically necessary”.
The latest round of funding is intended to cover the decline in business for period between 13th December 2021 and 14th February 2022.
This means that for a business employing ten people that has remained open over this period but has experienced reduced turnover, it doesn’t even cover a quarter of the cost of every full-time employee as compared to even the minimum weekly wage (and that doesn’t take into consideration other costs such as stock, rent and utilities).
As a result, it’s not surprising that business groups such as the Federation of Small Businesses are now saying that this level of support will do little to help hospitality businesses to deal with the fallout from the latest restrictions.
Thankfully, the Welsh Government has finally indicated that it will be looking to relax some of the restrictions they put in place last year.
However, this change may be too little and too late for a Welsh hospitality industry which has borne the brunt of the various lockdowns in 2020 and 2021 and is yet again in a position where business owners across Wales have had their livelihoods, and those of their staff, seriously affected through no fault of its own.