While broadly welcoming some of the short term measures - such as the six month reduction of the VAT rate (from 20 per cent to 5 per cent) for certain operators in the hospitality and leisure sectors - the regional property firm asserts that only the return of business confidence and economic growth will redress the imbalance of the Covid-19 impact on its markets this year (2020).
The firm believes that an extension of any permutation of the furlough scheme would create a false impression and simply kick the inevitable withdrawal further down the road, and so backed the Chancellor’s resistance to such pressure in his statement to the House of Commons.
However, Barker Storey Matthews is tempered in its view of the return-to-work employer bonus scheme - for returning furloughed employees to be in continuous employment until January (2021) - as being of too low value to prove pivotal in employers’ hard-headed business decisions about headcounts in the short and medium term.
Similarly, it believes the financial incentive to employers through the Kickstart scheme and the apprentice scheme grants are of a value that will have little impact on companies’ real time decisions about current and future payroll costs and recruitment plans.
While the temporary abolishing of stamp duty to the threshold of £500,000 for residential properties may help to stimulate house sales, this will, of course, not directly benefit the commercial property sector.
The agency’s leisure and retail sector specialists concede that the August ‘eat out to help out’ subsidy voucher might bring a welcome, temporary seasonal boost to those eateries who apply to qualify. But it questions whether this will simply shift dining habits from the weekend to Monday to Wednesday when the voucher scheme applies.
It is clear that significant operator uncertainty remains in such businesses about the return of patrons in any meaningful way post-lockdown easing. In addition, operators in these sectors - including the hospitality and attractions sectors - have to meet the additional costs of resourcing to ensure Covid-19 compliance.
In conclusion, Julian Welch, Director, Barker Storey Matthews, said, “The Chancellor of the Exchequer’s stimulus measures are just ‘baby steps’ and the type of measures that were, realistically, the only ones in his gift to take at this point
“We are all looking to have a clearer, more accurate picture of what doing business in the time of Covid-19 looks like and where the economic headwinds will take us by the time of the Chancellor’s Budget Statement in the autumn.”