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Second national lockdown a "calamity" for hospitality without more govt support

Published:  02 November, 2020

There are deep concerns across the hospitality sector about the impact of the government’s latest lockdown measures for England which were announced on Saturday evening by the prime minister.

In a strongly worded statement, UKHospitality called on the government to provide the industry with financial support that at least equals that offered earlier in the year.

“The costs to hospitality businesses of a second lockdown will be even heavier than the first, coming after periods of forced closure, the accumulation of mass debt and then significantly lower trading due to the restrictions of recent weeks,” the statement said.

“If hospitality, the sector that is our country’s third largest employer, is to survive and help drive economic recovery, it will need equivalent – or more – support than that of the first lockdown."

Echoing UKHospitality’s concerns, Ian Wright CBE, chief executive of the Food and Drink Federation, warned that the government had 72 hours to announce further financial measures before the food and drink sector faced “calamity”.

“Confirmation that the furlough scheme will be extended is extremely welcome news. However, we need further clarity that the food supply chain will be supported sufficiently,” Wright said.

“Without further reassurance thousands of jobs will be under threat as businesses consider closing their doors for good. The economic impacts of this decision threaten calamity unless we see further details of a rescue package in the next 72 hours.”

James Calder, chief executive of the Society of Independent Brewers, issued a similarly bleak warning on behalf of the country’s small breweries.

Without further government support, “We will see hundreds go to the wall before Christmas”, he said.

The closure of pubs during the first lockdown had a “devastating” impact of Britain’s small brewers, with sales falling by 82% on average. Moreover, shuttered pubs had to pour away some five million pints, with the cost borne by the brewers.

“Furlough funding cannot alone keep business who are struggling due to unfounded restrictions afloat. Small breweries still have rent, business rates, beer duty and VAT payments coming up – if they are unable to trade, then they cannot pay these,” Calder said.

“If the government wishes to shut the hospitality sector it needs to provide a full financial package for the entire supply chain covering wages, rent, business rate holidays, VAT, and the destruction of beer that now needs to be poured away, direct to the UK’s independent breweries.”

Both UKHospitality and the Society of Independent Brewers added their voices to the growing clamour for the government to set out “a clear roadmap” out of the lockdown.

The new lockdown was announced the day after it was revealed that UK hospitality sales collapsed by 48% in the third quarter.