Member Article

Region's business leaders give positive reaction to chancellor's coronavirus recovery package

Business leaders across the region have given a positive reaction to the measures announced in chancellor Rishi Sunak’s summer statement – dubbed the coronavirus ‘recovery package’.

Designed to both protect and create jobs while at the same time supporting vulnerable sectors, the headline measures include:

• Businesses paid £1,000 to retain furloughed staff • A £2bn Kickstart Scheme that sees government pay the wages of 16-24 for six months. • £111m invested in traineeships, with businesses offered a £1,000 per trainee payment. • Government to pay businesses up to £2,000 for every new apprentice under 25 for next six months and £1,500 for every new apprentice hired over 25 • Homeowners to benefit from £2bn of grants to make homes more energy efficient with £1bn set aside to improve public sector buildings • VAT on food, accommodation and attractions in the hospitality sector cut from 20% to 5% until January • “Eat out to help out” discount offering 50 per cent off, up to £10 per head, on meals at restaurants Monday to Wednesday during August. • Stamp duty threshold raised to £500,000

Nic Smith, managing director of Gateshead-based Commercial Maintenance Services (CMS) UK Ltd, said the company intends to unfurlough the remaining 44 staff still on the job retention scheme as well as take on five new apprentices as a direct result of the measures announced by Rishi Sunak in his summer statement.

He said: “We had been considering taking on some trainees and bringing further staff off furlough as client demand continues to grow.

“However, the incentive announced by the chancellor to create meaningful jobs for young people and the bonus surrounding the unfurloughing of staff, have definitely given us greater confidence to plough ahead with our future plans.”

The family-run firm – which installs, maintains and repairs business critical systems across the UK, including heating, hot water and electricals, together with catering, refrigeration, and commercial kitchen equipment – was badly affected by the lockdown as half of its clients are based within the hospitality and tourism industries.

CMS, whose clients include Travelodge, the Coaching Inn Group and Slaley Hall Hotel, was initially forced to furlough 66 of its 136 staff in March as work across the sector dried up.

Nic added that the chancellor’s measures to cut VAT in the hospitality and tourism sectors would have a beneficial knock-on effect on the business.

“Anything that attracts more people back into pubs, restaurants, cafes and hotels and gives them the confidence to spend money will be of benefit to CMS indirectly.

“We have already brought more people off furlough in recent weeks to meet the expected demand created by the reopening of hotels and I’m sure our catering division will be in demand as more commercial kitchens reopen.”

Phill Brumwell, Managing Director of High Street Hospitality, part of the High Street Group, which operates bars, restaurants and hotels, predominately in the North East, said: “We sincerely value all the support the government has provided during the pandemic and have worked incredibly hard to prepare our venues to reopen after lockdown to ensure that they are safe and welcoming places for our customers.

“These new measures will play a really important part in encouraging people to eat out and book rooms for a break while supporting the hospitality sector. We will be registering for the government’s ‘eat out, help out’ scheme and look forward to welcoming diners into our bars and restaurants for what will be an exciting August!”

Paul Gibson, director and chartered financial planner at Stockton-based Active Chartered Financial Planners, said: “I think the chancellor’s response was well thought out and measured. There were no shocks in terms of taxes, allowances, or pension schemes, which will allow the economy to get back on its feet.

“I was pleased to see a focus on spending, particularly in the hardest hit sectors, and investment in homes and infrastructure. This will make a real difference to people in the region who need support following a difficult period, and I think the measures introduced will have nothing but a positive impact.”

Charlene Lyons, Chief Executive of Black Sheep Brewery, based in Masham, North Yorkshire, said: “Pubs and restaurants are the heartbeat of communities and any measures that support them to boost footfall should be broadly welcomed. We hope people enjoy a nice pint of Black Sheep when they use their ‘eat out, help out vouchers’ for their meals in August!

The VAT cut is a step in the right direction to reinvigorate our sector, but we’d have hoped the chancellor would have gone further with a cut to Beer Duty. We pay 40 percent of our turnover in duty, which means around £7m a year is lost to tax. A short-term cut would help with investment in our business that, in turn, helps our pub customers and our North Yorkshire supply chain.“

Nicky Jolley, founder and managing director of Darlington-based HR provider HR2day, said: “I’m delighted that the chancellor has considered how to support staff who are currently furloughed once the job retention scheme ends in October. Providing money for businesses that bring back their furloughed staff, create new jobs and provide training opportunities will all benefit, which will benefit both businesses and employees.

“I was also pleased to see that the government-imposed timescales on keeping people in employment and ensuring that jobs will be meaningful and paid appropriately. This will make sure employees aren’t exploited and the businesses benefit from good quality work.”

Ian Henderson, founder, and chief executive of Cramlington-headquartered Boiler Plan, welcomed the incentives designed to create further ‘green’ jobs through a £2 billion green homes grant and £1 billion scheme to improve public sector buildings.

He said: “We already work with a number of charities to cut fuel poverty and the combination of a new generation of energy efficient boilers with the adoption of other energy efficiency measures, such as insulation, for homes is to be welcomed.

“It will have the effect of reducing fuel bills, cutting carbon emissions, and improving our housing stock long term – but the government must actively encourage people to take up these grants.”

“The chancellor has also provided much greater confidence moving forward when it comes to unfurloughing staff and creating new jobs as Boiler Plan continues to grow its business over the next 12 months.”

Ian Wardle, CEO of Teesside-based housing provider Thirteen, said: “Today’s announcement about the stamp duty holiday is very much welcome and builds on the Governments support announced last week of £12 billion to build new affordable homes over the next 5 years. This investment will help thousands of people to secure much-needed new homes, support many jobs in the construction and property sector and help alleviate the housing crisis.”

Phil Pallister, Managing Director of Houghton-le-Spring-based 0800 Repair, which delivers specialist domestic energy services for heating, plumbing, renewables and insulation undertaking around 15,000 services and repairs each year, said: “The Green Homes Grant scheme is a win-win for the environment, householders and our industry. It will support thousands of jobs in our sector, with the potential to generate more as the public take up these grants, which will improve the sustainability of their properties and reduce carbon emissions.

“We already have a large team undertaking these kinds of projects, but there is real potential to grow our workforce and create new jobs in the North East as we support homeowners and our social housing customers.”

Rosemary Du Rose, CEO of Beyond Housing, said: “The announcement by the Chancellor is in many ways a welcome one. Beyond Housing has a strong history of supporting apprenticeships and understands how they enrich the workplace, alongside helping to develop committed and skilled colleagues for the future. We believe young people are at greatest risk of being displaced from the job market as a result of coronavirus; therefore we fully support the announced schemes, such as Kickstart, which will help prevent a lost generation from realising their potential.

“We also believe that measures to support the tourism and hospitality industries, which are the lifeblood of many of our communities, will be essential to helping the region remain buoyant over what will be an unusual summer. Due to the high number of microbusinesses and SMEs that make up our regional economy, we hope these measures will prove successful in helping them navigate this challenging time.

“Finally, it is also extremely pleasing to see focus given to ‘green collar’ growth, as we see this as a significant obstacle facing the social housing sector over the next decade; however, we feel the announced £50m Demonstrator Project Funding falls short of what the sector needs to in order to meet this challenge. We look forward to future announcements on this matter recognising the huge potential it has for driving economic growth.”

This was posted in Bdaily's Members' News section by News Gathering .