Sunak's Covid-19 recovery plan: The response from businesses, unions, and industry groups

Video report by ITV News Business and Economics editor Joel Hills

  • Words by Multimedia Producer Wedaeli Chibelushi

Chancellor Rishi Sunak's emergency coronavirus plan has been called "bold", "hope-crushing" and descriptors in between by businesses and industry groups reacting to his announcement.

On Thursday, Mr Sunak announced fresh measures to replace the furlough scheme and help the UK economy to continue to recover during the second wave of coronavirus infections.

This included a new job support scheme, an extension to the self-employment grant and a promise to keep VAT at 5% for hospital and tourism firms until March 2021.

The Chancellor's 'winter economy plan' has received a mixed response from businesses, trade unions and industry associations.

Rishi Sunak sets outs his Winter Economy Plan to MPs in the House of Commons. Credit: PA

The business groups

Business leaders praised the Chancellor’s “bold steps”, saying hundreds of thousands of jobs will be saved.

Dame Carolyn Fairbairn, director general of the CBI, said it was right to target help on jobs with a future.

“Wage support, tax deferrals and help for the self-employed will reduce the scarring effect of unnecessary job losses as the UK tackles the virus. Further business rates relief should remain on the table," Ms Fairbairn said.

“The Chancellor has listened to evidence from business and unions... it is this spirit of agility and collaboration that will help make 2021 a year of growth and renewal.”

Paul Everitt, chief executive of aerospace trade group ADS, said the new package will provide "much-needed support" for employees across aerospace industries.

He added: “The impact of the sharp and sustained fall in demand for aviation threatens the future of many businesses. The scheme announced today will help minimise the damage and help companies retain valuable skills and experience.”

Jonathan Geldart, director-general of the Institute of Directors, said the new measures should "bring some relief" to many directors, but "at first blush, it’s not yet clear how much the scheme will help hard-pressed firms hold on to staff”.

The hospitality companies

The government announced a 10pm curfew on hospitality firms in England from Thursday. Credit: PA

Many of these "hard-pressed firms" are in the hospitality industry. They said their hopes were “crushed” as Mr Sunak's measures "don’t go far enough”. 

The chief of pub giant Young’s, Patrick Dardis, was among leaders to criticise the new measures, saying they will “not stop businesses from laying off staff”.

Bosses said that greater support is still needed to aid the recovery of pubs, bars, restaurants and other businesses, despite the Chancellor's extension of VAT cuts.

He announced plans to extend a current 15% cut on VAT for hospitality and tourism firms from January 2021 until the end of March.

Mr Dardis said the tax reduction is “helpful” but he believes new job support scheme measures will “make no difference”.

He said: “We can only afford to operate the new restricted hours and the work from home message with a much-reduced workforce."

Meanwhile, David McDowall, chief operating officer of Brewdog, tweeted: “The hopes of our sector have been crushed."

“The industry is still dealing with the crippling after-effects of the nationwide lockdown," Nick Mackenzie, chief executive of Greene King, said.

"The cumulative effect of the new restrictions, combined with the singling out of pubs, means the measures announced by the Chancellor don’t go far enough, especially for drink-led city centre pubs."

The arts and entertainment sector

In the creative industry, some highlighted the inability of the jobs support scheme to help organisations that remain closed by Covid-19. Others recognised that the extension of the self-employment scheme could assist the industry's many freelance workers.

Peckhamplex, an independent cinema in south London, recently announced it would temporarily close due to delayed releases and reduced customer numbers.

Peckhamplex believes it's a business that is "viable" - a reference to Mr Sunak insistence that the job support scheme will not be available to roles that will be relevant in a post-pandemic world.

"We believe long-term, we’re a viable business," chairman John Reiss told ITV News.

He added that should they gain access to the scheme, Peckhamplex could continue to open a reduced number of screens and have staff work in smaller teams.

However, Mr Reiss added that he will wait for the plan's "small print" to surface before he fully embraces it.

The chief executive of the Creative Industries Federation was also unable to wholly support the Chancellor's announcement.

Caroline Norbury welcomed the "bounce bank loan" scheme and said the emergency package will support workers and organisations still unable to operate at full capacity.

However, she added: "The eligibility criteria of the Self-Employment Income Support Scheme remains unchanged, which means that many of the sector’s two million self-employed workers – including limited company contractors, PAYE freelancers and the newly self-employed – will continue to fall through the gaps in Government support".

Meanwhile, the Music Venue Trust said the measures don't address the need to support a variety of sectors. It added that the live music industry "is not permitted to trade by Government restrictions, but has not seen any sector support directly offered” by the Chancellor's new plan.

Both the Music Venue Trust and the Creative Industries Federation have said they await details of the £1.57 billion Culture Recovery Fund, which will be announced in the coming weeks.

The unions

Mark Serwotka is the general secretary of the Public and Commercial Services union. Credit: PA Images

Unions have accused Chancellor Rishi Sunak of using a plaster to cover a “gaping wound” while jobs have already been put at risk.

Mark Serwotka, general secretary of the Public and Commercial Services union said the furlough scheme should have been extended beyond next month.

He claimed the Conservatives have put “ideological opposition” to state intervention over saving jobs.

"The Chancellor’s measures are akin to using a plaster to cover a gaping wound," he said, adding that union members in the commercial, aviation and culture sectors are being threatened with hundreds of redundancies.

Mr Serwotka said: “The Tories’ ideological opposition to increased state intervention is hurting the economy and costing people their livelihoods right now.”

Prospect general secretary Mike Clancy said the new strategy is "better than nothing," but "will do little for sectors that will still be effectively closed by Government restrictions, who will not be able to bring workers back for the minimum number of hours.”

Unison general secretary Dave Prentis said: “These measures show the Chancellor has been listening to unions and businesses.

“Supporting the wages of workers is an important first step in the battle to protect jobs across the UK.”