Hospitality costs pile up as Javid declares 19 July ‘end of the line’ for lockdown

Last night (28 June), newly-appointed Health Secretary Sajid Javid declared that 19 July will be the 'end of the line' for restrictions in England.

In an address to the House of Commons, he said that he was 'very confident' lockdown measures would be lifted on that date, but confirmed that there would be no early easing of restrictions as had been hoped by the hospitality sector.

“While we decided not to bring forward step four, we see no reason to go beyond the 19 July because in truth no date we chose comes with zero risk for Covid,” he told MPs.

“We also know that people and businesses need certainty. So we want every step to be irreversible. Make no mistake, the restriction on our freedoms must come to an end.”

The removal of all legal restrictions on social contact in England had been scheduled for 21 June, but was postponed by four weeks to 19 July​​ as a result of rising cases of the Delta Coronavirus variant first identified in India.

During this period, hospitality businesses must continue following social distancing restrictions and operating table service only.

However, from this week hospitality businesses will have to restart business rates payments, have to contribute to furlough salary costs and face VAT repayments.

UKHospitality has warned the delay in lifting restrictions risks further business failures via unsustainable accrued debts, as well as compounding problems in an already challenging labour market.

Meanwhile, the British Beer & Pub Association (BBPA) has said the continuation of restrictions will cost pubs a further £200m, adding that a further delay to the easing of lockdown measures would be 'catastrophic' for the sector. 

“Although continuation of the restrictions until 19 July is not a surprise, it is still a tough decision for our sector to swallow," says Emma McClarkin, chief executive of the BBPA.

“The restrictions staying in place for at least a further two weeks will cost our pubs £200m in these weeks alone.  In reality though, it will cost much more as confidence in our sector continues to remain low heading into the summer season so critical to our sector’s viability, as well as with the Euros on which normally would be a far bigger boost to our sector.

“Each week the restrictions stay in place, the likelihood of pubs being lost forever increases."

The Night Time Industries Association (NTIA), which represents 1,200 independent bars, clubs and live music venues across the UK, has called for Government to extend financial relief to night-time economy and events businesses, with one in four expected to close permanently without further Government support.

"We have been buoyed by the remarks of Sajid Javid, the new Health Secretary, about the need to remove restrictions irreversibly and as soon as possible," says Michael Kill, CEO of the NTIA.

"He must make good on this now so that the 19 July really is the terminus date, when we can open fully and experience culture again.

"During this extended period of closure businesses and workers need to be supported through the extension of current government financial reliefs. They cannot be expected to pick up further debt whilst waiting for the opportunity to open.”

Similarly, Kate Nicholls, chief executive of UKHospitality, has called for extensions to current financial relief measures to help protect both businesses and employees.

“An immediate extension of the business rates holiday would settle some commercial concerns but we would still then face employment costs that threaten jobs," she says.

"Following clear and confident assurances that restrictions would be lifted on 21 June, hospitality venues employed new staff in good faith but, necessarily, after the furlough eligibility date, so delay means that those employees cannot be furloughed. Instead, they find themselves in new roles, often with an increasing chance of being laid off - it’s not the best introduction to a struggling sector and is doing little to boost confidence in our workforce.

“If we must wait until 19 July to lift restrictions, and noting the recently published data from the Events Research Group​​ continuing to show the low risk posed by hospitality and events, the eligibility date must be retrospectively changed, accompanied by a targeted furlough with zero employer contribution for those businesses that remain forcibly shut or restricted.

"These measures would protect newer appointments and allow staff retention for when restrictions are finally lifted, rather than unfairly placing a further erosion on the cash-starved businesses trying to provide employment.”