I share your concern about the future of pubs and the hardship caused by the coronavirus outbreak. It is clear the economic effects of fighting COVID-19 last longer for businesses than the duration of any given restrictions, and we need to go further with our support.
As restrictions have been eased, the new tier system will allow pubs and the hospitality sector to begin to open up more widely. Pubs, restaurants and bars in tier 1 areas will reopen for table service and should close by 11pm with last calls taking place at 10pm. In tier 2 areas, pubs and bars that operate as restaurants can continue to serve customers within the restricted hours, although alcohol should only be served as part of a substantial meal. In tier 3 and 4 areas, the hospitality sector must close except for takeaway, delivery and drive thru services.
I recognise that wet-led pubs will not be able to open as fully as those that serve meals under the high and very high alert tiers. Every business forced to close will receive grants of up to £3,000 a month under the Local Restrictions Support Grant and local authorities are being provided with a further £1.1 billion to support businesses in their area. Where businesses are not required to close but are severely affected by restrictions, local councils will receive funding to provide grants up to £2,100 for each 28-day period. The Prime Minister has also announced a one-off £1,000 grant for wet-led pubs in tier 2 and 3 areas.
To further protect jobs, the Coronavirus Job Retention Scheme has been extended until April in response to coronavirus restrictions, and to give people and businesses across the whole United Kingdom the certainty they need over what will be a difficult winter. Under the extension, the Government will pay 80 per cent of wages up to a cap of £2,500, with employers paying employer National Insurance Contributions and pension contributions only for the hours the employee does not work. Flexible furloughing will be allowed in addition to full-time furloughing.
I am pleased that a robust package of support has been introduced since the start of the pandemic. No pub or other business in the hospitality sector will be required to pay business rates in 2020-21. HMRC has made it easier to claim back the duty on any beer thrown away as a result of pub closures. I also welcome that the temporary reduction of VAT to 5 per cent has been extended by a further three months to the end of March 2021. Additionally, the Chancellor will defer VAT repayments through a new scheme until March 2022.
I appreciate that there have been calls for a specific additional support package for pubs. I am very hopeful that the existing support provided will be enough, but evidence continues to be collected on the impact of the pandemic on the hospitality sector generally, and on pubs specifically, and I will keep this under review. Should the need arise, I will press Ministers to step in with further support for our pubs.
Issue date: 21/12/2020
