Targeting Pubs Is Wrong And Will Lead To Permanent Closures And Job Losses

The hospitality and on trade have reacted with dismay at the Prime Minister’s newly introduced 3 tier system which they say will significantly increase pressure leading to a loss of jobs in the beleaguered sector. The highest level of the new system – ‘very high’ – would see pubs close, with measures applied to Merseyside yesterday  meaning pubs and bars in the city will be forced to close from then. The BBPA estimates there are 970 pubs in the areas affected by the lockdown.

Responding to the announcement, the BBPA said that measures which single out pubs and bars are wrong. It has called for an evidence-based, proportionate response to the virus – citing latest PHE figures released on Friday 9th October showing that pubs and hospitality venues are not major sources of COVID-19 infections – representing just 3% of total transmissions. It urges Government to recognise the crucial role local pubs play in helping communities through this difficult time providing them with a safe space to meet and helping combat the risk of loneliness.

It says that based on this evidence, pubs and bars should not be singled out for closure – especially as they are well regulated, adhering to all safety measures including table service only and the rule of six, and are fully participating in NHS test and trace. It has consistently expressed concern that if pubs are forced to close people will socialise in unregulated and unsafe environments – even if told to avoid other households.

According to the trade association, the additional restrictions outlined in both the very high and high category of lockdowns will hit pubs – and the communities they serve – hard. Many pubs were already struggling for survival with low consumer confidence, the 10pm curfew, rule of six and limited operating space due to social distancing. Even if a pub is not forced to close, the additional restriction of households not being allowed to mix inside will reduce consumer confidence and restrict trade further.

The trade association has said it is also imperative that the Government is clear on the benchmarks between the different tiers.

Considering the announcement today, it says a stronger financial package of support than that announced by the Chancellor on Friday 9th October will be needed. According to the BBPA, the cash grants for businesses required to close in local lockdowns worth up to £3,000 a month will not be sufficient to cover high fixed costs and losses incurred during closure, especially compared to the support given in the full national lockdown earlier this year.

It also said this support would need to be available to those pubs facing additional restrictions under tier two of the Government’s new local lockdown system. It said it believed that support would only be given to those pubs forced to close as part of tier three, even though there would be thousands of pubs in tier two with unviable businesses if households were prevented from meeting inside them on top of the existing restrictions.

The BBPA also stated it has major concerns that many businesses may not be able to access the support due to State Aid caps. Likewise, it says more regular reviews of the local lockdowns will be needed than one a month, calling for reviews every two weeks.

Emma McClarkin, Chief Executive of the British Beer & Pub Association, said: 

“Singling out pubs for closure and further restrictions is simply the wrong decision and grossly unfair.

“It’s why we are calling for a proportionate response to the virus based on tangible transmission evidence.

“Public Health England figures released on Friday show hospitality was responsible for just 3% of total transmissions. Where is the merit in closing pubs to combat the virus based on that information? Especially when they are providing a safe and regulated place for people to meet at.

“Local lockdowns that close pubs will devastate our sector and the communities it serves. And most pubs will struggle to sustain viable business under tier two with their trade being so heavily impacted. Thousands of local pubs and jobs will be lost for good.

“It remains the case that even before these new local lockdown restrictions, pubs were already struggling for survival with low consumer confidence, the 10pm curfew, rule of six and limited operating space due to social distancing. For those pubs facing the middle tier of restrictions, they will come under even more pressure as customers from two different households will not be able to meet indoors in them.

“If the Government is really going to go ahead and force much of our sector to close, then a far stronger financial package of support is going to be needed than what the Chancellor already announced. The cash grants for businesses forced to close will not cover high fixed costs and write off costs for and are lower when compared to the grant support given during the national lockdown. Likewise grants and the additional job retention support should be available to those pubs facing the middle tier of restrictions and the inevitable further decline in their revenue they face.

“Accessing that support remains a critical concern for us too. We fear many businesses won’t be eligible for the support due to State Aid caps.

“It is also imperative that the Government is clear on the benchmarks between the different tiers.

“If regions across England do go into lockdown, then they will need to be reviewed far more frequently than once a month. Reviewing the lockdowns at least every two weeks would give closed pubs a glimmer of hope that they can return back to trade sooner than later.”

UKH has warned of a lack of support for hospitality businesses in tiers 1 and 2. These venues will face severe restrictions – including the damaging 10pm curfew – without proportionate support.

UKHospitality Chief Executive Kate Nicholls said: “The impact of all of these restrictions is huge and we are quickly reaching the point of no return for many businesses.

“For those businesses in tier 3 areas, forced to close their doors again, things look bleak but the support announced last week for closed businesses will hopefully give them the breathing room they need to survive another lockdown.

“There is currently a concerning lack of support on offer for hospitality businesses in tier 2, and to a lesser extent tier 1, despite their facing restrictions that is seeing trade down by between 40% to 60%. They will have the worst of both worlds, operating under significant restrictions without the financial support on offer to tier 3 businesses. Without enhanced grant support and enhanced Government contributions to the Job Support Scheme, many are going to fall by the wayside.

“It is time for the Government, at the very least, to rethink the mandatory 10pm curfew on those areas where COVID rates are low. It was imposed without credible evidence that hospitality is the source of increases in transmission, while some evidence points the other way. To leave hospitality out to dry would be a grave and risky move and would cost many people their jobs.”

Steven Alton, CEO of the BII commented:

“Our industry has been one of the worst affected during the pandemic, not only from enforced closures, but also with consumer confidence being undermined at every step by ever changing restrictions and the blaming of hospitality for the spread of Covid-19.

“Whilst the extension of the Job Support Scheme to pay 66% of wages will temporarily help save some jobs in Very High risk areas where businesses are forced to close, many of our members run pubs which were already trading at a loss, prior to the introduction of the 10pm curfew and further restrictions.

“In addition to this, for those who are not forced to close as they are not in High Risk areas, restricted trading hours, empty high streets and consumer confidence at an all-time low means their once viable businesses are now on a cliff-edge as the furlough scheme ends for them in 19 days. The Job Support Scheme will be of little use to employers, as they will need to contribute funds they do not have towards the cost of staff wages for hours not being worked.

“Hospitality was one of the only sectors in growth prior to lockdown, providing employment, tax revenue and vital social value, and it can only provide ongoing employment in the future, if we are supported with comprehensive, sector-specific support. Without that support, hundreds of thousands of jobs will be lost, many in the next few weeks.  We proved as a sector during trading in July and August with over 60 million customers every week that we were able to operate safely whilst kick starting the economy, with no discernible rise in national infections.

“Our sector is uniquely affected by all 3 levels of measures and many successful operators will be forced to make their workforces redundant and shut their doors for good. The long term cost of those redundancies will far outweigh the short term support that is needed for hospitality this winter. With so many young people in particular employed by our sector, the Government must recognise this and provide this critical support.

“No matter where pubs are within the new 3 tier system, they are restricted in how they can trade. Already the impact of the Rule of 6 and the 10pm curfew has seen a drop in trade of 30% or more in businesses that were only just breaking even before these further regulations were implemented.

“In order to have any chance of survival, as a minimum where ANY restrictions are placed on our sector, additional business support is critical.

Pubs in all tiers will urgently need:  Full Job Support Scheme access with no employer contribution and Government disruption grants linked to their rateable value to safeguard the future of these viable businesses.”