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Mon 14th Jun 2021 - Sector demands immediate emergency financial support to save industry after ‘Freedom Day’ delay
Sector demands immediate emergency financial support to save industry after ‘Freedom Day’ delay: Sector bosses have demanded an immediate fresh injection of emergency financial support after the government delayed “Freedom Day” in England, with many businesses on the brink of collapse. Prime minister Boris Johnson has confirmed the 21 June “roadmap” date for ending social distancing rules will be pushed back to Monday, 19 July, with a review in two weeks’ time. UKHospitality chief executive Kate Nicholls said: “The decision to delay is hugely disappointing but the government has judged the evidence and acted as it sees fit. It does, however, jeopardise the return on investment that the government has afforded hospitality and it’s crucial that further support is announced to push us over the line. The hospitality sector has already lost more than £87bn in sales in the pandemic leaving businesses deeply in debt and at risk of suffering ‘economic long covid’ without further support. Our businesses face incredible levels of debt and will now face a huge cost hike, with business rates payments set to recommence and rent accruals due at the end of the month. A swift indication the business rates holiday will be extended would go a long way to bringing succour to a battered sector – paying any amount of tax while still unable to trade viably would save businesses and, in turn, tax receipts in longer term. This four-week delay to lifting restrictions will cost the sector about £3bn in sales, put at risk 300,000 jobs and have a knock-on impact on bookings throughout the summer and into the autumn. Simply put, if the supports provided by the chancellor are not sustained and adjusted, businesses will fail and getting this far will count for nought Businesses need a swift, publicly-stated commitment that such support will be in place in the event of any delays, giving them much-needed reassurance after more than 15 months of closure and severely disrupted trading. Hospitality is desperate to get back to what it does best and can play a key role in the economic recovery of the UK - but only once it is given permission to trade freely. The prime minister asked for one more heave to get us out of restrictions – hospitality, too, requires one last heave, to be able to drive recovery.” The British Beer & Pub Association (BBPA) warned the delay will cost pubs £400m for this period alone – £100m per week of closure. The trade association said it has real fears of a lost summer for pubs, as confidence deteriorates and bookings are cancelled due to current restrictions staying in place. It said there can be no further delays now to the full reopening of pubs, and that all restrictions must be lifted on 19 July. Until then, it said a further package of support will now be required to see many pubs through the year. BBPA chief executive Emma McClarkin said: “Delaying the removal of covid restrictions by four weeks is incredibly hard for our sector to stomach. The delay will cost our pubs £400m for this period alone, but inevitably much more as confidence deteriorates and as a key part of the summer season is lost that is so critical to our sectors viability. Pubs and licensees are struggling to recover with the current restrictions they face and debts are accumulating. Every week the current restrictions stay and uncertainty continues, the likelihood of pubs being lost forever increases. Our pubs require as a minimum an immediate three-month extension to the business rates holiday, the ability to defer loan payments due now and a further extension of VAT support. Grants for businesses particularly affected, such as those pubs who cannot still reopen because of the current restrictions, must now also be put in place.” British Institute of Innkeeping chief executive Steve Alton added: “While many outside of the hospitality sector may perceive this delay as being a small price to pay, for pubs, with 16 months of severe disruption and closure behind them, any further delay requires further and immediate support. Government must now urgently extend short-term support to help minimise the effects that these continuing restrictions will have on pubs and the wider hospitality sector. We have seen the pent-up demand from customers desperate to return to their normal lives, but this delay and ongoing uncertainty will have far reaching consequences for every area of the hospitality sector, affecting the confidence of consumers, potential employees uncertain on the stability of jobs and essential investment in our viable businesses. Government must now break this perpetual cycle of uncertainty. It must now provide urgent clarity on how this further delay will enable our members to fully reopen their businesses as soon as possible. Critical to the recovery of our sector is the ability to simply trade free of restrictions and be able to plan for the future.” Night Time Industries Association chief executive Michael Kill said the government has “switched the lights off” for the night-time sector. He added: “This is a hugely devastating blow for the very industries that have been hardest hit by this pandemic. Many businesses have not survived this pandemic and others are on a financial cliff-edge, unable to operate viably. Hundreds of thousands of jobs have already been lost, a huge pool of creative talent has been swept away, and we have been left to suffer extreme financial hardship. This delay will drive confidence in the sector to a new low, culminating in more of our workforce being forced to leave the industry, and customers, who have been starved of social engagement, attending illegal unregulated events in place of businesses that are well-operated, licensed and regulated. These businesses are overburdened with debt and so any decision to delay the full reopening of our sector must be paired with a robust financial support package, including additional restriction grants, exclusion from furlough contributions, extension of loan repayment holiday for the Coronavirus Business Interruption Loan Scheme/Bounce Back Loans as well as business rates and VAT relief for the next 12 months, not forgetting the £2.6bn in commercial rent debt left unresolved. Distressed industries cannot continue to be held in limbo, with thousands of businesses left to fall. This delay, which again offers no clarity on when businesses can open, is leaving many in the industry angry and frustrated, alongside other businesses who have been locked down or restricted from opening through no fault of their own, and at their own cost.” Nick Mackenzie, chief executive of brewer and retailer Greene King, said “While we understand the need to follow the data, the delay to the roadmap is a huge blow for us and the entire hospitality industry. We now face further uncertainty and must wait even longer before we can start profitably trading, something that we have been unable to do since the start of the pandemic. We also risk losing out on the substantial amount of trade that comes with the Euros, a disappointment for us and for our customers that were looking forward getting that matchday atmosphere back. It is crucial that the government continues to support the industry financially until restrictions are fully eased. The business rates holiday ends on the 30 June, dramatically increasing our outgoing costs by £250,000 a day at a time when we will be losing millions every day in trade due to capacity constraints. Without this support, the sector, which has already been crippled during the last 15 months, will be in a highly precarious position.” Jonathan Neame, chief executive of Kent-based brewer and retailer Shepherd Neame, said the delay meant about 15 of the group’s London pubs will now not open as planned next Monday. He said the longer requirement for table service will push up costs “at a time when staff are hard to find” and called for more support. He said: “Does this now mean we are at risk of new restrictions with every new variant? The only acceptable destination is full and irrevocable removal of all restrictions.” Young’s chief executive Patrick Dardis called for business rates relief, currently due to begin tapering off from 30 June, to be extended by “at least four weeks” to help the sector. Chris Soley, chief executive of north east-based brewer and pub operator Camerons Brewery, tweeted: “Over to you Rishi Sunak – where’s the compensation we need?” Richard Wynne, founder and managing director of the three-strong London-based bar Callooh Callay, said: “Our main feeling is concern that this will hugely impact consumer confidence in the hospitality industry. We're all spending a lot of time and money making sure our venues are safe and up to pristine standards. Each set back just heightens fears of our customers, understandably. It's unbelievably frustrating. However, we're trying our best to keep focused on the beaming customers coming through our doors every day, making sure they and our team are safe and all having a brilliant experience – doing what we do best.” Erpingham House founder Loui Blake added: “The delay causes serious concern for an already stretched hospitality sector – not only are we facing significant staff shortages, but we’ve also lost rent protection. Further delays on extending capacity are likely to force many businesses to close their doors, despite hospitality consistently proving that it’s one of the safest industries in regards to transmissions and restaurateurs heavily investing in measures to protect customers.” Dean Rogers, founder of immersive game provider Rogue Productions, which is launching the Perfect Crime in London’s Liverpool Street next week, said: “This feels like cancelling Christmas all over again. Fortunately, we were running an experience in line with the current restrictions so we will still be able to open.” Simon French, chief economist at City broker Panmure Gordon, said the extra knock-on effect for the overall economy would be up to £140m as pubs have to maintain “table only” service through the Euros football tournament, and nightclubs remain closed. All areas of Scotland are due to move to level zero covid restrictions on Monday, 28 June – meaning bigger groups can gather in cafes, pubs and restaurants, although they will still have to observe social distancing. Limits on indoor gatherings in Northern Ireland are scheduled to be relaxed on Monday, 21 June – when the current rules in Wales will also be reviewed.


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