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Hospitality trade begs ministers to speed up aid schemes

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Hospitality trade begs ministers to speed up aid schemes

Bars and restaurants are asking ministers to clarify the government's emergency financial support schemes as they face the need to lay off hundreds of thousands of workers across the sector.

Sky News obtained a letter from UK Hospitality (UKH), the trade association, to Chancellor Rishi Sunak, who says companies are "having to make decisions in the dark" and warns that many will not survive long enough to access state funding.

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In it, Kate Nicholls, executive director of the UKH, said that the lack of details on how the Coronavirus Job Retention Scheme (CJRS) would work would make it difficult to make decisions in meeting rooms as to whether employees could be retained "by dismissing them "during the COVID-19 pandemic.

She also complained that banks seemed to "profit from struggling companies".

She said urgent questions are needed about the extent to which companies are responsible for payroll costs and whether the £ 2500 monthly allowance offered by the government would cover wages or also include those costs.

Nicholls highlighted the uncertainty about determining the correct salary rate for his members.

"From the hospitality point of view, we feel that additional gains, through tips and service charges, should be included as they can be verified through HMRC returns," she wrote.

The commercial agency also raised the possibility for hospital workers to work elsewhere during the coronavirus crisis.

"In addition to unpaid work, we believe that there are reasons for employees to supplement key employees in other sectors in the short term, whether in social assistance, food retail and pharmaceutical or food production.

"Individuals should not be penalized for this and a mechanism should be introduced to reward them for this activity.

"There must also be the team's ability to perform auxiliary tasks for the current employer, where they represent a very small proportion of the standard function, such as ensuring the integrity of the property," wrote Nicholls.

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Sunak was also asked in the letter to help speed up the provision of finance to distressed hospitality companies through the Coronavirus Business Interruption Loans Scheme (CBILS).

"The experience of accessing bank funds on CBILS has been almost universally negative," wrote Nicholls.

"The most common problem is that banks tell companies that they are not eligible for CBILS and should instead take out a loan with interest accrued by the bank.

"The reasons for this include companies with very strong balance sheets.

"The implication is that the bank wants companies to reduce their available assets or take out commercial loans, instead of accessing loans guaranteed by the government.

"At the very least, this seems to go against the spirit of the government's announcements made last week and, at worst, it appears to be profitable at the expense of struggling companies."

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The controversy over participating banks' demands for personal guarantees from their commercial customers prompted Sunak to intervene to find a solution, according to bank sources.

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