Sunday, January 16, 2022

Furious business leaders warn of ‘disastrous Christmas’

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Angry business leaders have warned they face a “disastrous Christmas” after the UK government rejected calls for urgent financial help and decided not to introduce further Covid restrictions to slow the rapid spread of the Omicron variant.

Trade groups from the pub, retail and leisure industries have called for immediate clarity after a fortnight of mixed messages that have led to a collapse in consumer confidence, mass cancellations of restaurant and event bookings and a sharp drop in high street shopping visits.

But Boris Johnson offered more ambiguity on Monday, promising to review the data “hour by hour” after a tense two-hour cabinet meeting.

After clashes with senior Tories who opposed further restrictions, the Prime Minister did not announce any new support but warned people to prepare for more Covid controls in the future, leaving businesses in limbo.

The prime minister dashed hopes that he would give in to pressure after days of meetings between the chancellor and business leaders.

Hospitality bosses renewed their call for urgent help, accusing the government of implementing a “lockdown in everything but name” as the numbers painted an increasingly grim picture for the industry.

A survey by the Night-time Industries Association found that half of nightclub companies estimate they will have to cut 50 percent of their staff if they don’t receive financial support.

Late-night venues reported visitor numbers fell 40 per cent following the introduction of Covid passes last week, while bookings in London were down 80 per cent, reported by pub chain Fuller.

Figures from Springboard show that high street and mall footfall fell by 19 percent last week compared to the same week in 2019, which has weighed heavily on retailers’ holiday sales.

Research by trade association UK Hospitality found a third of pubs are cash-strapped and revenue fell by 46 per cent in December. The group is demanding cash grants be announced this week to avoid a wave of business failures in the new year.

Governments’ scientific advisors have warned that delaying the restrictions could result in tens of thousands more hospital admissions and mean that the restrictions may ultimately have to last longer. However, senior figures in Mr Johnson’s government are still divided over whether to introduce new curbs.

“Unfortunately, I have to say to people that we must reserve the opportunity to take further action to protect the public, to protect public health and to protect our NHS,” the Prime Minister said.

“It’s important that we act cautiously, but it’s also important that we look after the hospitality, theaters and other parts of our incredible entertainment industry that have suffered and are suffering.”

Experts warned that a circuit breaker lockdown after Christmas, currently being considered by ministers, could lead to job losses and lost business if not accompanied by targeted financial support.

“Even if you think the risk assessment is too finely balanced to make a decision on restrictions, having to announce targeted leave immediately is grossly unbalanced. Pubs, theaters and the rest are hammered,” said Torsten Bell, CEO of the Resolution Foundation.

Real Ale campaign chairman Nik Antona said a curfew for pubs and bars in England was “terrible”.

“What pubs, social clubs and their supply chains need is a new comprehensive government support package.

“This must include grants, employment support, rental support and tax breaks for businesses. Existing financial programs aimed at getting the hospitality industry through reopening are simply not good enough when government action is driving consumers en masse from pubs.”

The chancellor has resisted calls for additional help, citing existing measures including a reduced VAT rate for hospitality businesses and a 25 percent relief from trade tax rates. Many companies had previously received a 10 percent discount on their tariffs.

The Welsh Government has pledged to cut tax rates on shops, pubs, restaurants and leisure businesses by 50 per cent from April next year.

While the tax breaks have been welcomed, they are not making up for billions of pounds in lost revenue.

A Night Time Industries Association survey of over 500 nightclubs, bars, pubs and food service establishments revealed growing fears for the future of the sector.

A third of respondents predict they will be forced to close within a month.

“It is truly a terrifying prospect to see so many venues in our sector bleeding, with a lockdown in everything but name and absolutely no government acknowledgment of that fact,” said Michael Kill, chief executive of the Night Time Industries Association.

“The government has had twenty months to learn how our sector works; it’s hard to believe that we’re standing here again as if we returned in March 2020, imploring the government to listen to us, understand how businesses work and recognize that inaction is a death sentence for our industry. It really is a disastrous Christmas.”

The hospitality industry makes around a quarter of its profit in the run up to Christmas but revenues have been decimated by growing Covid fears.

UKHospitality CEO Kate Nicholls said today that the crucial trading phase had been “hugely damaged” by a steady stream of pessimistic news.

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