The Covid-19 furlough scheme needs to be extended until the end of 2020 to prevent wide scale job losses nationwide, says the boss of one of the South West’s leading brewers.
Kevin Georgel, chief executive of has sent home 1,400 of the firm’s 1,600 employees on the Government’s Coronavirus Job Retention Scheme, designed to prevent a tsunami of redundancies from businesses poleaxed by the lockdown.
But Chancellor Rishi Sunak is believed to be on the cusp of announcing a July end to the scheme, under which furloughed workers receive 80% of salary from the Government.
Mr Georgel, who has had to close 185 St Austell Brewery pubs from Bristol to Cornwall, said the scheme must stay in place to achieve the Government’s objective of protecting employment.
And he said it needs to extend until the end of 2020 to give the economy time to recover from the coronavirus lockdown, and said: “We will desperately need it to continue past June or it will have achieved nothing and we would have to make difficult decisions about cutting overheads back. It needs to carry on for all this calendar year.”
He suggested two possible options for the Government: either tapering the scheme so workers continue to receive some wage support, or bringing some staff back to work and leaving a proportion on furlough.
“It has to have flexible elements to enable us to meet the economic challenges,” he said.
Indeed, the Chancellor is thought to be considering a tapering option, possible by cutting the subsidy level and lowering the £2,500 cap on monthly payments.
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But he has been stung by the size of the scheme, with 6.3million people currently supported, at a cost to the Treasury of £8billion.
The Government is insisting that “no decisions have yet been taken” but Mr Georgel said: “Furloughing has been essential to our sector and enabled us to continue to employ our teams, a significant number of people.
“We furloughed 1,400 people. “We have 1,600 staff but would have increased that in summer to more than 2,000.
“We want to bring out teams back, but that will have to be done over time. So the furlough scheme is something that will have to stay in place in our sector.”
Mr Georgel, who heads a brewery famous for its Tribute, Kovev and Proper Job brands, also wants other support for businesses. For example he would like the Retail, Hospitality and Leisure Business Grant Fund, which provides a £25,000 hand out, extended to cover pubs and other sector businesses with a rateable value above £51,000.
“Some of our best pubs have had no support other than the loan option, so there is a strong argument for the Government to increase grants,” he said. “We still have fixed costs and are still burning cash so we need support in addition to the Job Retention Scheme.”
He said loans are not ideal and added: “People need to know they have a viable business. If they end up with a lot of debt from no fault of their own. Being faced with a mountain of debt undermines confidence for the future.”
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Mr Georgel stressed that pubs are an important element in the 海角视频’s economy and may still struggle even if the lockdown is lifted.
“I struggle to see it will bounce back,” he said. “Pubs are a key part of the economy and the community, and need to be protected.
“And we are a highly taxed sector. A typical pub pays over £140,000 a year in tax. So we want the Government to underpin the pub sector, and see that as an investment.
“They will have to go forward on a sector-specific basis. Some areas of the economy will need support, and pubs will need support.”
Mr Georgel also believes pubs should be able to reopen with customers kept only one metre apart instead of the current two metre social distancing rule.
He has called social distancing an “oxymoron” and said: “The whole point of a pub is to create a great social experience.”
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He has stressed that he only wants his 185 venues to open if it is safe to do so, but said the Government should follow the World Health Organisation’s (WHO) recommendation that people stay at least a metre apart during the coronavirus pandemic.
He said that would give pubs and other hospitality businesses “a fighting chance” of being able to make enough money if the Government lifts lockdown restrictions but keeps social distancing in place.
Currently ministers are advocating a 2m rule but Mr Georgel said this will not be practicable. He said pubs have large overheads and will need to attract enough customers to make it worthwhile opening.
And he is also concerned about what other measures bars may have to implement, particularly if serving food.
He said menus will have to be pared back because fewer staff will be allowed to work in kitchens, and, with other industry leaders, is in talks with the Government about what other measures – such as face masks, plastic screens, and queues to get into a venue – will be needed.
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And he fears these could prevent an already timid public from venturing back to pubs even when lockdown is over.
Mr Georgel said: “Social distancing is an oxymoron, but we are trying to find our way though that with the Government and work out what we can safely implement for the safety of customers. But there are limitations, where it becomes impossible to do that.
“There is an increasing acknowledgement that we will have to have some degree of social distancing,” he said, “But we think the 2m rule is impossible in pubs.
“The WHO has a 1m rule, so we are encouraging the Government to embrace the WHO 1m rule, which is more achievable in a pub. That 1m rule gives us a fighting chance.”
He said pubs will need to be able to attract enough customers post-lockdown and explained: “Pubs are highly operationally geared with a high level of fixed costs. If we lost 30% of revenue it would be a tipping point at which a pub becomes uneconomic to open. That’s the challenge.”