Yahoo Finance National lockdown in England 'would devastate hospitality sector'
A national lockdown in England would be “absolutely devastating” for the hospitality sector, leading industry spokespeople have said.
Kate Nicholls, the chief executive of UKHospitality, said it was likely that some businesses would lose all trade as a result of stricter measures and the sector would need significant additional help to survive another lockdown.
“A third of our turnover would normally be generated between Halloween and Christmas Eve. We’re going to lose nearly all of that,” said Nicholls, who represents 800 businesses operating 90,000 venues. “These are businesses clinging on by their fingertips already. A further national lockdown will only accelerate the closure rate and business failure rate unless we get significant additional support.”
According to UKHospitality, the sector turned over £130bn in 2019, but was on course for just £80bn this year, not accounting for the impact of a second lockdown, which Nicholls said could decrease turnover to £65bn or less. Around 500,000 jobs have been lost in the industry as a result of the pandemic so far.
“It’s difficult to predict the impact until we know the details but if it’s a full lockdown for four to six weeks, the current system of grants and the job support scheme will not be enough for businesses in the frontline of those restrictions, particularly hospitality,” she said.
She called for an expansion of grant support, an extension of VAT and business rates relief, and greater testing to enable businesses such as nightclubs to reopen.
New national lockdown restrictions – including the closure of pubs and restaurants – are expected to be announced for England early next week, following a steep rise in cases. Scientists have warned that coronavirus is spreading faster than their worst-case scenarios forecasted, and could lead to 85,000 deaths this winter.
Hospitality organisations, however, believe a national lockdown could cause even greater damage to businesses, which will lose out on profits over the festive season – generally their most lucrative.
Emma McClarkin, the chief executive of the British Beer and Pub Association (BBPA), said that locking down pubs across the country would be “counterproductive and hugely damaging”.
“The evidence is clear that pubs are Covid-secure, particularly in areas with lower infection rates,” she said. “Without the right support it would also destine thousands of our pubs and jobs to complete obliteration, as well as major disruption to supply chains and Britain’s brewers.”
With a national lockdown looming, McClarkin called for greater financial support for pubs. “If the government is even considering another full lockdown, it must ensure the same, if not greater, levels of support are provided as they were the first time round,” she said.
The chair of the Federation of Small Businesses, Mike Cherry, described the government’s messaging on the issue as confusing. He suggested that measures had been too short notice to enable firms to plan ahead.
Research conducted by UKHospitality, the British Institute of Innkeeping and the BBPA found last week that more than three-quarters of the organisations’ member businesses reported making a loss. The bodies said that without greater government support, by February 2021 there would be 750,000 fewer jobs in the sector compared with the year before without greater government support.
The national officer for hospitality at Unite, Dave Turnbull, said the union had seen a huge increase in redundancies, enforced zero-hours contracts and lay-offs without pay as a result of the ending of the furlough scheme.
“While a small number of hospitality employers are seeking to protect jobs by utilising the new job support scheme provisions, it is shameful that a larger number, who have taken millions in taxpayers’ money from the job retention scheme and other government provisions, are now seeking to rid themselves of any responsibility for low-paid workers who generated huge profits for them during the good times,” he said.
Frances O’Grady, the general secretary of the Trades Union Congress called for wage subsidies for those unable to work to be raised to 80%. “Lockdown will only work if people aren’t worried about their jobs and livelihoods. If the country is locked down again, government support for workers and businesses should be no less than it was in March,” she said.
