Shut down of hospitality will have “severe knock-on effect” on taxi industry warns Mayor Burnham

Updated: Oct 12, 2020

Image credit: Ross Campbell

“Closure of hospitality businesses will have a severe knock-on effect on people working in the taxi trade” warns Greater Manchester Mayor Andy Burnham.

The Mayor was also heavily critical of the latest coronavirus furlough package unveiled by the Government, claiming it was not “sufficient to protect our communities through the challenging period which lies ahead”.

The criticism comes as plans for an impending lockdown gathers pace due to a rise in COVID-19 cases in the region. Greater Manchester and other areas are likely to face stricter measures, which includes reported pub and restaurant closures.

Northern leaders have written an open letter to northern based MPs calling for better lockdown financial support. The letter to MPs included: “Despite many requests, it has taken a long time for the Government to recognise that a proper support package for people and businesses affected by local restrictions would be needed.

“When it finally appeared late yesterday, it was not sufficient to protect our communities through the challenging period which lies ahead.

“Specifically, we cannot understand why people whose place of work is forced to close by Government imposed restrictions are only being offered two thirds of their wages. While it may be possible for people on middle or higher earnings to live on two thirds of their salary, that is not the case for the low-paid staff who work in hospitality. They do not have the luxury of being able to pay only two thirds of their rent or their bills.

“Earlier this year, the Government set its national furlough scheme at 80%. We can see no justifiable reason why the local furlough scheme should be set at 67%. To accept it would be to treat hospitality workers as second-class citizens and we think that is wrong. Many of these workers have already faced severe hardship this year.

"On top of this, the timetable for the introduction of the scheme also presents a major problem. It will start in early November which means that payments will not be made until early December, six weeks after businesses have been forced to close. 

“We also have serious concerns that the local furlough scheme will be limited to businesses forced to shut. There are many other businesses who supply the hospitality sector who will see their own trade collapse if their customers are to close. In fact, the effect of restrictions might be to choke off footfall in many of our towns and cities and many more businesses and venues such as theatres, arenas and cinemas are likely to be impacted by new restrictions. We believe that any local furlough scheme should be much more widely available to businesses in areas with the highest level of restrictions who can demonstrate a severe impact on trade arising from them.

“In addition, we believe that financial support should be extended to those areas in Tier 2. Many businesses and individuals will be impacted by the proposed measures included in Tier 2, and indeed by limiting financial support to Tier 3 only, it could create a perverse incentive for areas to move into Tier 3 to support local businesses.

“It is also regrettable that there is no additional support on offer for people who are self-employed. Closure of hospitality businesses will have a severe knock-on effect on people working in the taxi trade and security. Many of those people are self-employed. We believe that there needs to be a local self-employment support scheme to recognise this.”

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