The Labour Party has issued a stark warning that the hospitality sector faces collapse as businesses close and redundancies rise unless the government offers sector specific support.
Lucy Powell MP, the shadow business and consumers minister, is warning that the sector faces collapse with a wave of closures and redundancies unless ministers ensure sector specific support is made available to businesses struggling through no fault of their own.
Labour is also encouraging the public to shop local and back small British business. Ms Powell calls on the government to do whatever it takes to save businesses and protect jobs by making sure as many businesses as possible can reopen safely in a way which “maximises economic viability, whilst minimising the risk to the health of customers and staff”. The economic support for businesses needs to sit in tandem with their ability to trade. For hospitality this is going to take a lot longer than other sectors.
Figures this week show the scale of the economic cost of Covid-19, with the economy shrinking at the fastest pace on record in April. Hospitality and small retail have been particularly hard hit. Every previously viable business that goes bust will prolong and deepen the economic downturn we face. A long and deep recession is a far greater threat to our long-term public finances than the support which businesses need today to help them bounce back more quickly.
Small retail and hospitality businesses are the lifeblood of our high streets and at the very heart of our communities but the lack of support for some in the sector and a series of contradictory anonymous briefings have created confusion about re-opening for companies and the public alike.
Labour is calling on ministers to:
- Stop anonymous speculative briefings on social distancing guidelines.Social distancing guidelines are vital information for venues to prepare to reopen safely in respect of layout of venue and capacity of venue, both of which impact on revenue and financial decision making. Businesses will require clarity and transparency. As with other aspects of Ministers’ response to the Covid-19 crisis anonymous speculative briefings to the press are deeply unhelpful, confusing business and the public with mixed messages. Any changes to the guidelines should be led by the science and come about through a transparent and clear process.
- Give guidance on business-critical issues such as sanitising, PPE for staff, security provision, use of toilets, the use of phone apps for ordering, vertical drinking and table service. Without this information, many business operators are struggling to plan their opening and short-term business model.
- Set out what help will be available for operators who have to remain closedbecause the 2m rule prohibits them from being able to open safely and/or it is not financially viable for them to do so.
- Ensure furlough flexibility. Business wants clarity around the part time furlough scheme and whether this can be brought forward. If outdoor areas are open from 22 June, this will not require a full-time complement of staff. For others businesses such as theatres, nightclubs, small indoor pubs and summer festival businesses for whom social distancing makes opening not viable, the furlough top up will be impossible because they have no cash coming in.
- Consider what flexible support can be given to other operators. For many businesses that do reopen it will be at significantly reduced capacity with higher costs such as more staff, security and PPE. They too need more flexible support.
- Work with local authorities, take innovative action to help businesses expand operations and boost tradeby reducing bureaucracy including:
- Ensuring rapid license variations, on issues such as opening hours or setting up licensed spaces, which currently require long notice periods.
The party is also calling for:
- Reforming the operation of temporary event notices so they are not subject to time limits. Reduce 5 working day time limit for late temporary event notices to 3 working days.
- Deregulating the sale of alcohol as part of any outdoor licensed seating area for the duration of the crisis, so that there is no requirement for separate premises licence/temporary event notice, to allow outdoor bars, or allow a fast track licensing scheme for this.
- Enabling local authorities the ability to operate licensed spaces without going through full licence process or needing temporary event notices
Investigate the conversion of parking spaces and other areas into outdoor seating uses
Build public confidencein going to pubs and restaurants, and the high street by ensuring the track and trace and other measures are fully in place.
Lucy Powell MP, Labour’s Shadow Minister for Business and Consumers, said:
“Small businesses closed to keep us safe. With retail now re-opening, we should shop local and support high streets to give them a boost.
“It’s vital that ministers turn their attention to the hospitality sector, providing clarity and guidance so that businesses can plan to reopen in the coming weeks. That means no more backroom briefings to Tory MPs, and more public advice and guidance to companies about how they can safely reopen.
“Alongside this, we urge the government to publish an action plan which maximises economic viability, whilst minimising the risk to the health of customers and staff. If they fail to act, our communities will lose much-loved pubs, bars and restaurants, and we’ll see a wave of closures and unemployment which will damage villages, towns and cities across the country.”
