Government urged to do more for crisis-hit firms
PRESSURE is growing on the government to provide more support for Island business as hundreds of firms face closure due to the coronavirus outbreak.
With town virtually silent yesterday, firms in the hospitality and retail sectors are facing massive drops in revenue due to increasing numbers of Islanders self-isolating or practising social distancing after the total number of confirmed cases yesterday rose to 16.
There have been 405 negative tests while 78 are still awaiting results.
Last week the government announced that it would pay up to £200 of staff wages per week to support businesses during the crisis. Simon Soar, chief executive of the Jersey Hospitality Association, said that the move was a ‘step in the right direction’.
But he added that the measures did not go far enough and he feared many businesses would not return following the outbreak, with owners instead opting to retire or work elsewhere.
Now, 19 business people have jointly signed a letter accusing Chief Minister John Le Fondré of a lack of leadership during the outbreak. Neil Faudemer, one of the signatories, said that the government was failing to act ‘quickly enough’ and had provided ‘no guidance’ for firms during the crisis.
Shortly after the Government of Jersey announced its package of payroll support on Friday, UK chancellor Rishi Sunak announced that his government would pay 80% of staff wages up to £2,500 a month during the crisis.
Mr Soar said he felt that the UK measures were more at the level that was required to safeguard the long-term future of many firms.
‘The Jersey measures are simply not going to be enough for some businesses. You have hotels in Jersey which have hundreds of staff,’ he said.
‘And all of a sudden they have nothing but cancellations and no income. It’s not sustainable. I am talking to people all the time who cannot afford to pay their staff wages.
‘And if people are becoming unemployed or businesses are lost then that is a disaster for the economy.’
He called on Jersey, which has hundreds of millions of cash reserves, to take drastic action.
‘The government has a strategic reserve for a rainy day and these are the rainiest days we have had in 75 years, since the Occupation,’ he said.
‘There are 4,500 people in the sector and they need help right now, not to just protect their fund. The measures they have introduced, like deferral of social security, are not direct support, they are only assisting with cashflow and are just kicking things down the road for these businesses.
‘People are not going to want to end up in debt or take out loans or declare themselves bankrupt. That would just put them back to where they started, after all the work they have done to establish their business.’
According to the last set of States accounts, made up to the end of 2018, the value of the Strategic Reserve was £800 million, although this would have dropped due to the recent crash in share prices.
Mr Soar said that he believed without the right support now, businesspeople would walk away from the hospitality sector and many of the Island’s best businesses would be lost permanently.
‘The government needs to provide direct support or else people are going to shut up shop and not return to the industry,’ he said.
‘They will retire or just go to work for someone else and we will lose the hospitality sector as we have it and that for me is heartbreaking.’
Mr Faudemer, managing director of Mailmate, added that he was ‘very concerned’ about the performance of the government in response to the crisis.
‘They have just not acted quickly enough and we are seeing no leadership. The worst thing is they are providing no guidance for us, so we can’t make our business plans,’ he said.
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