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Chancellor unveils new measures to protect jobs

Chancellor of the exchequer Rishi Sunak has announced a raft of support measures which he says aims to protect job and keep businesses solvent.

Addressing the House of Commons, 8 July, the chancellor unveiled a Jobs Retention Bonus, giving £1,000 to businesses who bring back employees from furlough, as well as a temporary VAT cut for hospitality and tourism businesses, down from 20% to 5%.

Another measure which may appeal to events businesses is a “kickstart scheme”, which aims to get unemployed 16 to 24-year-old into work as well as new payments for businesses hiring apprentices.

However, the chancellor said he makes “no apology” for winding down the Government's furlough scheme for subsidising worker wages. Unless a restart date for the events industry is announced soon, this will come as a worry for events businesses, despite the new Job Retention Bonus.

Jane Longhurst, chief executive of the the Meetings Industry Association (mia) welcomed the chancellor’s support to the hospitality sector, but expressed frustration that yet again the events industry was not specifically mentioned. “Once again the events sector that contributes £70bn to the economy supporting over 700,000 highly skilled jobs wasn’t noted specifically. We await further clarification as to how or whether the gesture will be extended to business meetings and event," she said.

Longhurst also expressed worry that by failing to extend furlough, further event businesses would struggle. She added: “While we recognise that the government’s furlough scheme cannot be extended indefinitely for all, it was extremely disappointing to hear that there will be no exceptions, particularly for those sectors in most need. Instead it will finish for all on 31 October, which is another blow for our sector.

“The one glimmer of hope for business meetings and events is the positive news that employers who bring their employees back from furlough, will be rewarded by the new job retention policy. The £1,000 bonus may help delay some inevitable redundancies, allowing the sector a chance to get a clearer idea of how well business is going to recover, before implementing cuts.”

Lex Butler, chair of the Hotel Booking Agents Association (HBAA) was openly dissatisfied with the announcement, demanding to know why the events industry was yet again omitted from the support measures. “Yet again the chancellor and the Government have not listened to the many outspoken voices of the business events and meetings industry asking for financial help to save jobs and keep the industry alive. Why is this sector being excluded," she said. 

Butler reiterated the HBAA's demands, which if not implemented, could see 30% of the people working in events lose their job. She said: “We need financial support immediately. We need a reduction in VAT for our sector, on venue bookings and event organising services, and we need a delay in paying corporation tax to support the many businesses which are in dire financial straits.

“The only good news today for the business events and meetings sector came before the chancellor’s statement in Prime Minister’s Questions when, in answer to a question from Stephen Hammond MP about events, the prime minister said that there would be ‘news later in the week.’ We can only hope that it is good news."

Businesses in travel and tourism were more upbeat about the announcement, yet issued caution. Clive Wratten, CEO of the Business Travel Association (BTA), said that the announcement gives a “limited kickstart” to the wider travel industry. “We welcome the support for returning employees to work and the VAT reduction for UK accommodation,” he said.

Joss Croft, the CEO of travel trade association UKinbound said the chancellor’s economic recovery plan recognises the value of hospitality and tourism, and cutting VAT from 20% to 5% and the Eat Out to Help Out scheme will deliver “immediate positive impacts for businesses and consumers.”  

Croft was cautiously optimistic about the Job Retention Bonus scheme but noted still not all businesses would survive. He said: “It [Job Retention Bonus] will also help tourism and hospitality businesses, but only those that survive into next year.

“These measures will not help the many businesses involved in inbound tourism who drive regional economies and jobs, and who are on the brink; longer-term support will still be required for these businesses, which have been hit even harder than domestic and outbound.”

However, the Association of Independent Professionals and the Self-Employed (IPSE) responded to the chancellor’s statement by pointing to the lack of any mention of the self-employed.

Although IPSE has welcomed the measures to boost the economy, including the employer bonus at the end of the furlough scheme, it has urged the Government to introduce a “tapered end” to the Self-Employment Income Support Scheme (SEISS) to ensure freelancers do not face a “cliff-edge” in August.

Andy Chamberlain, director of policy at IPSE expressed his concern. He said: “We urge the chancellor to introduce a tapered end to SEISS to address the clear imbalance between employees and the self-employed.

“While considering measures to kickstart the economy, we also call on the chancellor to adopt policies that will back those groups, like limited companies and the newly self-employed, who missed out on support during lockdown.”

He added: “Freelancers will be vital in getting the UK back to business, but if they are to play their part, they must get a fair deal and the backing they need from the Government.”

An announcement about the future of the events industry is expected this week.