Over 50 hospitality businesses in furious attack on Gov support

Saturday 09 January 2021

The owners of more than 50 cafés, restaurants and bars have banded together in an unprecedented display of anger towards the Council of Ministers over the level of support offered to their industry.

In an open letter, the businesses have shared their “absolute disappointment, frustration” and “mounting anger” at the current Phase 3+ Co-Funded Payroll scheme.

Presented as “a heartfelt plea from the little guys” and “small family-run operators whose voice is not normally heard”, the letter asks the Government to explain why, despite ordering the close of the hospitality and events sector, they have not offered sustainable support. 

Pictured: Since 4 December, all hospitality businesses have been forced to close.

In particular, it focuses on how the support offered during December’s circuit breaker closure - a time of year it states hospitality makes up to 30% of its annual sales - has not been enough and has left businesses in a “terrifying” situation going into the New Year.

Referring to the support measure allowing businesses to defer taxes and contributions, it states that these are not enough to keep businesses afloat.

“This might be a short-term help to cash flow,” the letter reads, “but all it does is kick the proverbial tin can down the road”, simply “delaying the agony of business failure.” 

Pictured: The letter states that with the current level of support, businesses that survive the pandemic will still suffer "enormous damage."

It further points out that with their latest announcement that hospitality will likely not open again till March or even Easter, across a calendar year of 1 March 2020 to 28 February 2021, the Government will have instructed hospitality businesses to shut for 17 weeks – almost a third of a year.

It concludes with a passionate plea for the Government to reassess how they support hospitality and events businesses.

“You might think you are saving the public purse now by restricting levels of support,” it says, “but when these small businesses cease trading, jobs will be gone and Government revenue of GST, ITIS and Social Security Contributions (both employee and employer) along with the en desastre debt of companies, will be lost. 

“Don’t also forget the knock-on effect to wholesalers, suppliers, maintenance and other support industries, who service, supply and rely on our industry. 

“Then finally contemplate the devastation to the tourism industry, and the potential loss of those unique businesses that make Jersey, ‘Jersey’.”

It follows a plea from the Jersey Hospitality Association for "clear timelines" of when the sector can expect to open up again after Ministers unveiled their exit strategy from 'lockdown lite' on Thursday.

The Chamber of Commerce held a meeting with the Chief Minister and Economic Development Minister this week to explain the plight of non-accommodation hospitality businesses, as well as retailers and those working in hair and beauty, who have all been excluded from accessing fixed-cost Government support.

In an update to members issued last night, the business lobby group said that it was "hopeful" that further support would be secured for those sectors.

READ: The letter in full...

We, the undersigned, write to all of you collectively, to express our absolute disappointment, frustration and unfortunately, mounting anger, at the level of support offered to the hospitality and events industry by the Phase 3+ Co-Funding Payroll Scheme. 

The scheme was launched, in response to your 4 December instruction to close, with a headline grabbing quote of “enhanced support” and a 90% ceiling contribution. Disappointingly, most hospitality businesses will not get the 90% contribution to their wages. It will, in reality, be less than the 80% level offered and claimed in Phase 2 of the scheme.

We would simply like an explanation as to why you are so reluctant or resistant, to support properly, those businesses that you have instructed to close. 

We understand the health reasons behind your decisions, and that you have followed advice from medical professionals, which we support. 

At another time, we might argue that well run restaurants and cafes were not the problem, and should not be financially sacrificed. But, the simple fact is, you have closed us and imposed enormous trading restrictions on the hospitality business, that are proving to be, without exaggeration an existential threat to a large number of our industry.

You have instructed us to close, and in effect you have taken control of our businesses. It is, therefore, absolutely Government’s responsibility to support us properly.

It is no exaggeration that a December close was disastrous. It was a desperately important time of year, when hospitality can take up to 30% of annual sales. To go into the new year without December trading is frankly terrifying.  

Yes, some will survive, but they will survive with either enormous damage to their financial foundations, or face a massive increase in unsustainable debt. 

All will question whether it is simply worth continuing. Without doubt, jobs will be lost, livelihoods will be destroyed, all of which will place an increased burden on the state in income support.

One of the support measures “allowed” by the Council of Ministers, has been to allow businesses to defer taxes and Contributions.  

This might be a short-term help to cash flow, but all it does is kick the proverbial tin can down the road. You are just delaying the agony of business failure, and you need to seriously consider, whether without proper, unequivocal support now, those businesses who have deferred those statutory charges, will be around to pay them. 

We know, that the Jersey Hospitality Association and Chamber of Commerce have made representation to you for increased support measures. And you have received the usual letters from the big groups of Licenced venues, but this letter is a heartfelt plea from the little guys.  

The small family run operators, whose voice is not normally heard, or indeed listened to. We get on with running our businesses, employing people, paying our taxes and doing what we do best. 

But there is real danger that we will lose, through no fault of our own all we have worked so hard to create. All we have done is to follow your instruction to close. We need your help, we need proper support, and we need it quickly.

There is lots of talk about adapting our businesses to the current environment. “Adapt and survive” is the cry, “get an App”, “do take-away” and even more advice, is shouted from the side lines by people who clearly have no understanding of the fundamentals of the hospitality business.  

We are bricks and mortar businesses, that feed our customers in physical environments. The clue is in the name – it’s Hospitality. We deal with real people not avatars. We simply can’t build an app and go online. 

Take-away does not sustain the business model that restaurants’ and cafes work to. Which, incidentally, is a business model that has survived through generations, even throughout conflicts, but cannot survive a Government instruction to close without proper support.

With the latest announcement, taken on a calendar year from 1 March 2020 to 28 February, you will have instructed us to close for at least 17 weeks out of 52.  

That is almost a third of our trading year, with the rest of the year operating under severe constraints of either alfresco only and/or reduced seating capacity. 

The event caterers have been severely restricted, for virtually their whole trading year. That is simply not a business model that is financially sustainable without significant Government support and a genuinely “enhanced” Co-Funding Payroll scheme.

You might think you are saving the public purse now by restricting levels of support, but when these small businesses cease trading, jobs will be gone and Government revenue of GST, ITIS and Social Security Contributions (both employee and employer) along with the en desastre debt of companies, will be lost. 

Don’t also forget the knock-on effect to wholesalers, suppliers, maintenance and other support industries, who service, supply and rely on our industry.  

Then finally contemplate the devastation to the tourism industry, and the potential loss of those unique businesses that make Jersey, “Jersey”.

Please, please, please, listen to us. Your failure to support us properly now, will affect the island for many years to come.

Yours faithfully,