Trade bodies demand targeted support amid warning second lockdown 'will hurt for years to come'

By James McAllister

- Last updated on GMT

UKHospitality BBPA NTIA demand targeted financial support amid warning second Coronavirus lockdown 'will hurt for years to come'

Related tags: Coronavirus, lockdown, Restaurant, ukhospitality, Government

Trade bodies have demanded the Government provide hospitality businesses ordered to close this week with financial support that's proportional if not greater than what was available during the first lockdown.

UKHospitality said the viability of hospitability businesses across England is 'on a knife edge', while the British Beer & Pub Association (BBPA) warned that thousands of pubs and many of the breweries that support them could be lost.

It comes after Prime Minister Boris Johnson's announced on Saturday (31 October) that hospitality venues across England will close for a month from Thursday​ (5 October) under what he described as ‘tough new national measures’ that will effectively see the country plunged back into lockdown for at least a month.

Under the restrictions, all restaurants, pubs and bars in England must close, although takeaways and deliveries will be permitted.

According to real estate adviser Altus Group, the lockdown will impact 37,616 pubs and nearly 27,000 restaurants.

Reacting to the announcement, 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 trade body made clear that it welcomed the Prime Ministers confirmation that the furlough or Job Retention Scheme (JRS) would be extended for the duration of the new lockdown, covering 80% of employee's monthly salary up to £2,500.

However, it added that more support was needed if the sector is to survive.

“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.”

'Financial Armageddon'

Michael Kill, CEO of the Night Time Industries Association (NTIA), echoed UKHospitality's words, and warned that the Prime Minister's announcement leaves night-time economy businesses facing 'financial Armageddon'.

“It’s frightening to think that given the gravity of the situation, we are still being given limited communication, consultation or time to respond, or plan around these decisions,” he said. 

“The entire Night Time Economy consisting of thousands of businesses and hundreds of thousands of workers are suffering.  Their plight is being made even worse by the huge void in financial support for the sector. 

"Many of our businesses have experienced extreme financial hardship, been presented with unmanageable operational measures and have in some cases been forced into complete closure since March.”

“We are extremely concerned for business owners, operators, freelancers, creatives and people working within this sector.  The level of despair and financial pressure this Government has placed them under can only be described as slow torture. 

"As a result we are seeing a substantial rise in people suffering from deteriorating mental health, with many simply unable to support themselves or their families.”

“Without immediate and significant Government financial support and an exit strategy, it is not an exaggeration to say that this will be the final nail in the coffin for many night time economy businesses.  And even with support, many viable businesses will be lost. 

"This moment will go down in history as the moment that the Government destroyed a globally significant sector through poor communication and mis-management.”

Meanwhile, the BBPA said the 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.   

“Make no mistake, this could be the final straw for thousands of pubs and brewers," said Emma McClarkin, Chief Executive of the BBPA.

"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. 

“As ever, we stand ready to work with Government on such a plan. 

"We served our communities well throughout the first lockdown, and we want to continue to serve communities across the United Kingdom through this closure and for many years to come. Support from the Government with investment in the pub and brewing sector will reap rewards economically and socially. 

"Only such support will ensure that we can come together once more to enjoy the warm welcome of the great British pub with a great British pint once this crisis has passed.” 

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