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UKH: “Cumulative effect of new restrictions hugely damaging”

Published:  23 September, 2020

The industry has called on the government for immediate and wide-ranging support following the latest hospitality restrictions imposed on the on-trade. 

Ahead of the new 10pm closure order, and table service only, rules – restrictions that could stay in place for six months, the industry has warned that job losses and business failures will be an inevitability without further support. 

While the restrictions may appear “moderate” in isolation, the cumulative effect was going to be “hugely damaging”, warned Kate Nicholls, CEO of UK Hospitality.

“These restrictions are a further, potentially fatal, blow for many hospitality businesses. Consumer confidence is going to take another hit and we cannot hope to recover while confidence remains low,” she said.

Moreover, she said the shift back towards working from home was also going to hit city centre hospitality “very hard”.

“These businesses have already lagged behind as office workers and tourists have stayed away and they are going to take another battering.”

Most disheartening, she added, was the announcement that the new rules will potentially be in place for six months. 

“Lots of businesses will not survive this and we are going to see more and more people lose their jobs unless we have the support to counterbalance these restrictions.

“The government must immediately announce an exhaustive package of financial support, otherwise our sector is facing ruin. Employment support must be extended. The furlough scheme is already winding down and it comes to a complete halt at the end of October. Unless it is extended for our sector, businesses are inevitably going to have to make staff redundant. We are looking at a steady stream of job losses for six months, otherwise.”

Speaking on behalf of the pub industry, the curfew was particularly heart-breaking for those pubs in areas where infection rates remain under control, said Emma McClarkin, CEO of the British Beer & Pub Association.

“There seems to be little available evidence that pubs, with their strict adherence to government guidelines, are unsafe, so we are unsure that this blanket measure will make a major difference. Removing a key trading hour on top of fragile consumer confidence and the reduced capacity pubs already face will put thousands more pubs and jobs at risk.”

The Food and Drink Federation meanwhile reiterated the “potentially fatal blow” to manufacturers who specialise in supplying the hospitality sector. 

“Many pubs and coffee shops will not be able to trade profitably under these new rules and will have to close again, with further threats from enforced closure due to local or national lockdowns. Those businesses and their suppliers also now face losing their furlough lifeline,” said CEO Ian Wright CBE.   

“We encourage government to heed the recommendations of the Treasury Select Committee and consider a targeted extension of the Coronavirus Job Retention Scheme for the hospitality sector and its manufacturing supply chain." 

With a vaccine and end to social distancing, these ‘squeezed middle’ businesses would “thrive again”, he added. 

“By extending their support through this unprecedented but limited period, these businesses can play a full part in building a jobs-rich recovery beyond the pandemic, preventing the unnecessary economic damage of business closures and the scourge of long-term unemployment.”