Sector responds to Prime Minister’s roadmap; says additional financial support urgently needed in Budget if Great British Pub is to survive
The hospitality and licensed on-trade has reacted with dismay at the Prime Ministers “roadmap” to the eventual lifting of lockdown announced yesterday (February 22).
In his announcement on the Government’s planned roadmap for reopening, the Prime Minister said outdoor hospitality will only be allowed to open from April 12th at the earliest, alongside non-essential retail, followed by indoor reopening with restrictions 5 weeks later at the earliest, on May 17th.
Responding, Emma McClarkin, Chief Executive of the British Beer & Pub Association, said:
“Today we were looking for a clear roadmap out of lockdown for our sector and an indication of the dates when we could fully reopen and operate viably, again.
“Whilst we have received earliest possible dates for reopening, our sector will continue to face severe restrictions that limit their business and stop them from being viable. The reality is debt is mounting and many pubs simply won’t be able to hold out to April or May and will close for good before any door gets open.
“Outdoor service only from April 12th will likely mean that 3 in 5 pubs across the UK will remain closed. That’s 29,000 pubs still not able to open either because they don’t have any outdoor space or simply because they will not be commercially sustainable. Because of this, the majority of pubs will not reopen until May 17th at the earliest, meaning that they will have been closed for almost 8 months.
“It will mean just 17% of our pubs’ capacity will open from April. That will cost our sector £1.5 billion.
“The Government must now plug that £1.5 billion hole for our sector with vital support in the Budget next week if thousands of pubs are now to survive.
“The Prime Minister said he will not pull the rug out and do whatever it takes. We will hold both him and the Chancellor to this. Our sector will need more grant support until pubs can fully reopen, as well as furlough extended to save jobs for pubs not able to open in April. Even when they open in May, pubs will need help on their long road to recovery through an extension of the VAT cut and Business Rates relief – as well as a beer duty cut. The recovery will take much longer than expected and we will need this support for 12-24 months. This support will need to be extended to brewers and supply chain partners who are relying on the timely reopening of pubs as they depend on them for trade.
“It is imperative that pubs who do try to reopen with outdoor service only are also offered support. Their business will not only be severely restricted by reduced capacity, but also the highly unreliable British weather.
“The Government must also stick to 21st June as the end date for social distancing restrictions. This will increased pubs’ economic viability in being able to make good trade for the rest of the year and give the hospitality sector some much needed certainty.
“Returning to work and offices also remains unclear, which is of huge concern for those pubs reliant on such trade. We need the Government to clarify and encourage a timely return to return to work and help boost consumer confidence to re-emerge.
“Without these measures, thousands of pubs will be at risk of closing for good, along with hundreds of thousands of jobs and livelihoods being lost forever right at the last hurdle of this crisis.
“Last year we saw almost 2,000 pubs close for good – that’s 5 pubs every day closed forever. We cannot let this happen again in 2021. Local pubs play a vital community role by providing wonderful and regulated places where we can safely meet with our families and friends – something we are all longing to do again soon.”
UKHospitality Chief Executive Kate Nicholls said: “The sector is obviously devastated that its reopening will be so far away. From the start of November, the sector will have been closed for nearly 200 days, with just a couple of weeks of heavily restricted trading in December. A major package of financial support is imperative if hospitality is to survive.
“The Prime Minister says that the reopening schedule is driven by data, yet all the data points to hospitality being relatively safe and linked to only a tiny number of cases. Vaccinations and the fall in infection rates has de-risked our reopening even further. Over the past year, the Government has repeatedly miscalculated the risks posed by hospitality.
“This delay in reopening will make the job of survival all the more difficult for businesses only just clinging onto existence. It is much more than just an inconvenience for many employers in our sector, it is another delay that they cannot afford and, for too many, will not be able to survive.
“When we can open, our businesses are going to be facing severe restrictions. Only 40% of hospitality businesses have an outdoor area and, in some cases, this is little more than a table and a couple of chairs. Outdoor only opening initially just does not work for huge numbers of businesses. Enforcing table service, plus the rule of 6 and a maximum of two households will see businesses trading below sustainable levels – though it is a relief to see the back of the curfew and substantial meals.
“The job for the Government now is to make sure that our sector survives this further period of closure intact. The Chancellor has just nine days to save thousands of businesses and hundreds of thousands of jobs that simply will not be there without a substantial package of compensation. According to the latest Government data nearly two-thirds of hospitality businesses will run out of cash before May, before they are allowed to re-open.
“In the immediate term, we need a generous compensation package that goes beyond what was offered in January if we expect businesses to survive, with a commitment to eliminate new costs that are due to hit, such as HMRC tax bills and loan repayments. An extension of the VAT cut and business rates holiday must be confirmed along with a targeted extension of the furlough scheme. We must also have an extension of the rent moratorium, with loan repayments and HMRC debt delayed in order to give businesses some breathing room from the ruinous mountain of debt that has built up for too many. Asking businesses to start paying this money back when they are not even open could be terminal for many.”
“The night-time economy has been left in limbo once again. While hope is now in sight, nightclub venues will have been closed for 15 months. There is a real risk of losing these businesses forever if the Government doesn’t step in to make sure they survive. The loss of our nightclubs would be a huge cultural blow as well as a significant economic one.”
“Hotels have been housing key workers, NHS staff and vulnerable people through the peaks of the pandemic. They have been helping quarantine arrivals to the UK and they have been operating successfully and securely. They already have their tried and tested systems in place to keep guests and staff safe. Pushing back the reopening of hotels to late May makes little sense.”
On international travel:
“It is extremely welcome to see a specific review into international travel and how that can return. This will be critical to the recovery of the hospitality sector and we look forward to contributing to this review.”
Dan Simms, Co-Head of Retail Agency at Colliers, comments: “I think it is a profoundly depressing, over cautious and unwelcome announcement for the retail and hospitality sector. We have a world leading vaccine programme that is now rapidly changing the situation, yet the Government seems to be unable to even attempt to balance health, societal and economic considerations and shows no real understanding of the scale of the emergency for the sector. The dates announced will be simply too late for many businesses that have been able to trade for only small periods over the last year and the Government support merely papers over a few cracks.”
David Fox, Co-Head of Retail Agency at Colliers, comments: “Whilst it is understandable that the Government remains cautious and reluctant to commit to re-opening the retail and hospitality sectors, without a continuation of support and clarity on business rates and the arrears moratorium, there will inevitably be further failures. It is incumbent for the Government to bridge the uncertainty of the immediate weeks, providing the time and hope that businesses need to prepare for a return to normal trading and benefit from the predicted consumer spending spree.”
Neil Pattison, Director at Caterer.com, commented: “Despite their rigour and focus in implementing successful Covid-secure protocols, it is frustrating to see that restaurants and bars will be slow to fully re-open compared to other businesses. Studies have shown that with the right systems in place, hospitality businesses have extremely low transmission rates. The sector is raring to go, leading the way for trading responsibly and introducing procedures which ensure the safety of staff and customers. Equally, customers are keen to return and enjoy hospitality venues, and this will positively impact both the economy and mental wellbeing in the UK. As the vaccine programme continues at pace and data allows, an earlier full reopening should be considered for hospitality venues as outdoor operation is simply not feasible for so many businesses.
“Alongside this, it’s crucial that government support continues to protect jobs in hospitality. It’s clear social distancing will be in place for the foreseeable future, and many businesses will continue to struggle to remain viable as their capacity to serve customers will be reduced.
“The hospitality industry is ready to play a major part in the UK’s economic recovery and we need to work hand-in-hand with government to build trust and confidence, so this vital sector can find its feet again.”