Friday 23 October 2020 5:55 am

Entrepreneurs don’t want Rishi’s restaurant handouts — they want to be allowed to do their jobs

The Conversative Father Christmas — Rishi Sunak, to you and me — has visited once again.

In a better-late-than-never display of magnanimity, the chancellor has finally realised that conditions in Tier 2 Covid areas — which now cover 26.7 million people — make operating impossible for thousands of businesses, particularly in the hospitality sector. 

Whereas up until now businesses which were not explicitly forced to close their doors were more or less on their own, Tier 2 firms will now be eligible for a more generous version of the Job Support Scheme announced last month.

Read more: Rishi Sunak’s new business support: What does it mean for you?

Jobs will be saved thanks to the new offer, which requires employers to pay staff to work 20 per cent of their normal hours (down from 33 per cent) and pay five per cent of the remainder, with the government topping up 62 per cent of hours not worked. 

If you’re confused by the maths of this, you are not alone, as even the director of the Institute for Fiscal Studies had to recheck his calculations, but it does amount to a significant helping hand for affected businesses. With job losses in the hundreds of thousands expected in the hospitality sector alone, it is no wonder that the news is being welcomed in press releases and soundbites by Tier 2 business owners. For many, it literally stands between their life’s work and annihilation. 

But if Downing Street expects entrepreneurs to be grateful for this munificent offering, it should think again. A belated handout does not take the sting out of watching something you have built up, nurtured, and adapted multiple times become a pawn in the government’s increasingly desperate game of three-dimensional chess against the virus.

Hospitality business owners are growing more and more frustrated with how their industry is being treated as a scapegoat from the rise in Covid cases — which flies in the face of the scientific evidence. There was, for example, no science-based justification for the blanket 10pm curfew imposed in September that required bars and pubs to close their doors before their busiest time had even begun and forced customers out onto the streets at exactly the same time each night.

And the ban on households mixing anywhere indoors in Tiers 2 and 3 — including hospitality venues that have pumped hardwon investment into making their spaces Covid-secure — seems vastly disproportionate to the fraction of infections occurring in this sector, which amounts to just 3.5 per cent according to the latest Public Health England figures.

Cash grants, loans, and enhanced Job Support Scheme payments are a sticking plaster for what many feel is an unfair and counterproductive attack on their industry.

Of course, reducing transmission is vital from both a health and economic perspective. But the relentless focus on hospitality in particular feels excessive, and the subsequent support package is an insult to entrepreneurs who have shown far more agility in adapting to the crisis than government officials have.

Number 10 does not appear to understand that business owners — and, indeed, many of their employees — would prefer the freedom to earn their own way. The money set aside for paying their employees’ wages (currently unspecified, as the chancellor has neglected to say how much his new scheme will cost) would be better spent on bringing down transmission rates in other settings so hospitality can operate free of arbitrary restrictions. 

In short, they want the government to get on with its job, so that they can do theirs.

This is not ingratitude. Hard as it may be for some in Westminster to believe, people generally don’t want to rely on state handouts. They take pride in working for a living. This is especially true of entrepreneurs — individuals who have taken huge risks to strike out on their own and start a business, because they are passionate about what they do.

These efforts might be scorned by those who see a bigger role for the state in every crisis. For four years, Labour under Jeremy Corbyn made it clear that “profit” and “enterprise” should be dirty words, with individual agency subsumed by an ever-growing governmental behemoth.

But the Conservatives’ whole political ideology rests on the notion that people want and deserve the opportunity to earn their way to prosperity. This was, after all, the rationale for successive Tory governments over the past decade cutting back on welfare benefits and investing in entrepreneurship.

At some point in this pandemic, the Conservatives who currently inhabit Downing Street appear to have forgotten these basic principles. Their strategy increasingly seems to be robbing individuals and businesses of their ability to operate, then expecting them to be grateful when the state steps in to grace them with support — support that would not be needed were it not for misguided government intervention. 

As the favoured Conservative economist Adam Smith put it: “The natural effort of every individual to better his own condition, when suffered to exert itself with freedom and security, is so powerful a principle, that it is alone, and without any assistance, not only capable of carrying on the society to wealth and prosperity, but of surmounting a hundred impertinent obstructions with which the folly of human laws too often encumbers its operations.”

This is the kind of entrepreneurial energy and passion that Britain will need if it is ever to recover from Covid-19. Pandemic or no pandemic, this government should be wary of crushing it.

Read more: End the war on pubs — hospitality isn’t to blame for the Covid crisis

Main image credit: Getty

City A.M.'s opinion pages are a place for thought-provoking views and debate. These views are not necessarily shared by City A.M.

Share: