Hospitality in England 'on a knife edge' and needs as much support as first lockdown to survive second

31 October 2020 by
Hospitality in England 'on a knife edge' and needs as much support as first lockdown to survive second

Pubs, bars and restaurants in England will be required to close from Thursday 5 November until 2 December except for takeaways and deliveries as the prime minister has confirmed the country will enter a second lockdown.

Boris Johnson confirmed the news in a press conference this evening and said that as a result the furlough scheme will be extended through November, with chancellor Rishi Sunak confirming it will cover 80% of employees' wages.

Johnson will present these plans to Parliament on Monday, with a vote scheduled for Wednesday, ahead of the restrictions coming into force on Thursday, which will also see the closure of non-essential shops, leisure and entertainment venues and people told once more to stay at home. It has not yet been confirmed if hotels will also be required to close.

Exceptions include educational purposes, those who cannot work from home, for exercise, medical reasons, to shop for food and essentials, and to provide care for vulnerable people.

From December it is expected the country will return to a tiered system according to local and regional trends and data.

Johnson said he still "believes passionately" that the tiered system introduced earlier this month "was the right thing to do" and said: "We will continue as far as we possibly can to adopt a pragmatic and local approach in the months ahead but… we've got to be humble in the face of nature and in this country, alas, as across much of Europe, the virus is spreading even faster than the reasonable worst-case scenario of our scientific advisers".

During the press conference, England's chief medical adviser Chris Whitty said the prevalence of Covid has been going up "extremely rapidly" over the last few weeks, with around 50,000 new cases per day and rising and increases in cases in "virtually every part of the country". Chief scientific adviser Sir Patrick Vallance said projections suggested the second wave of coronavirus had the potential "to be twice as bad or more compared to the first wave".

Johnson said that "no responsible prime minister can ignore" the projections, that there is "no alternative" and "unless we act we could see deaths in this country running at several thousand a day". He added: "We must act now to contain this autumn surge."

A statement from trade body UKHospitality said: "Public health objectives are, rightly, the motive for the new measures, and for that reason we entirely support whatever proportionate action is necessary.

"The costs to hospitality businesses of a second lockdown will be even heavier than the first, coming after periods of forced closure, the accumulation of mass debt and then significantly lower trading due to the restrictions of recent weeks. The sector was hit hardest and first, and this recent shutdown will hurt for months and years to come. The extension of furlough for a further month does help to protect our workforce during this difficult time.

"If hospitality, the sector that is our country's third largest employer, is to survive and help drive economic recovery, it will need equivalent – or more – support than that of the first lockdown.

"Hospitality businesses have already been pushed to the limits, with many closures already. For those that have survived, viability is on a knife edge, as is the future of the tens of thousands of businesses and hundreds of thousands of jobs that depend on hospitality, including through its supply chain, right across the country.

"It is critical that businesses are given a lifeline to survive the winter, before being given the support to enter a revival phase in 2021, as the nation's prospects improve. A clear roadmap out of lockdown and through the tiers will also be vital for businesses to plan their survival, and the safeguarding of hundreds of thousands of jobs.

"It is important to remember that some parts of hospitality, such as nightclubs, have not even been allowed to re-open. The support for those, now that potential reopening has been kicked further into the future, must be redoubled to ensure that they are not lost forever."

The British Beer & Pub Association said the 28-day lockdown will result in thousands of pubs and many of the breweries that support them being lost, unless the government urgently provides the sector the same, if not greater, levels of support than it did for the first lockdown.

Chief executive Emma McClarkin said: "As a sector we are of course devastated to have to close our pubs and are fearful for their future, but we recognise the situation and that the spread of Covid-19 is serious.

"Make no mistake, this could be the final straw for thousands of pubs and brewers. It will also create major disruption to our supply chain partners whose businesses are now also at severe risk.

"The level of financial support will need to be same, if not greater, than that provided for the first lockdown earlier this year. This means grants for ALL pubs sufficient to cover ongoing fixed costs, and compensation grants for Britain's brewers who will also be permanently devastated by the lockdown. The news of the extension of the full furlough scheme for this lockdown period is welcome, but we await the full detail of it, and will need a full support plan far beyond the lockdown period to save our great British pubs and brewers.

"A clear, early signal on an economic stimulus package from April next year is a vital element of this. This includes extending the business rates holiday and the hospitality VAT cut, and support on beer duty."

Sacha Lord, night time economy adviser for Greater Manchester, tweeted: "I absolutely welcome the extension of the furlough scheme at 80%, but find it absolutely insulting, that when it was just the North, it was 67%."

While Chris Mitchell, managing director of London-based contract caterer Genuine Dining Company, tweeted that his office will remain open for staff. He said: "The mental health of our staff and myself is as important as this virus. We have spent time and consideration making our workplace safe. Our staff can choose but I will be there if people need a chat."

According to real estate adviser Altus Group the restrictions are understood to impact 37,616 pubs and nearly 27,000 restaurants.

Photo: Flickr – number10gov

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