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U.K. Government Orders Restaurants, Bars, Pubs, and Cafes to Close

The Chancellor confirms that government grants will cover 80 percent of wages for those not working

British Prime Minister Gives Daily Address To The Nation On Coronavirus Leon Neal - WPA Pool/Getty Images

Prime minister Boris Johnson has ordered U.K. restaurants, cafes, bars, and pubs to close their doors as of midnight tonight (20 March) in the latest of unprecedented measures aimed at halting the spread of the novel coronavirus (COVID-19). Takeaway food and restaurant delivery services can continue to operate, which many London restaurants have already introduced in the last few days. He said it would be reviewed on a monthly basis.

Johnson said that “we are collectively telling cafes, pubs, bars, and restaurants to close their doors tonight.” Nightclubs, gyms, cinemas, and leisure centres also have to shut down. This decision follows prior “advising” of the public to avoid restaurants, pubs, and bars, which restaurateurs had decried as insufficient measures in the face of both COVID-19 and growing uncertainty over their operational future.

“We will stand behind you, so that you can stand behind your workers,” the Prime Minister later said.

To try and mitigate the economic impact, Chancellor Rishi Sunak announced new financial measures to support restaurant businesses, in the wake of industry dismay and anger at a lack of action and clarity over payment of wages and rent earlier this week as the government has announced incremental policy changes. Sunak confirmed that the government will supply grants to cover 80 percent of the wages for “retained workers” who are not working, up to the value of £2,500 per month. He also confirmed that wages would be backdated to the 1 March, with employees on a given company’s payroll as of 28 February covered under the plans. VAT payments for this quarter will also be deferred until the end of June.

Grants for “The Coronavirus Job Retention Scheme” can be applied for by businesses through HMRC.

U.K. Hospitality said that while the measures are welcome, immediacy of cash flow is the greatest concern for restaurants right now:

“It is vital now that all rent payments for hospitality businesses – due on Wednesday next week – are cancelled or deferred. Mass business failure is likely without it as businesses have no cash. This a big package but there’s a growing problem as money doesn’t flow through until the end of April. The lack of urgency and immediacy will cause real problems. No business has yet got its hands on a loan and companies in hospitality – now told to close – will run out of cash. Cash runs out in days not weeks. I suspect many staff will have to be laid-off on reduced hours or pay until the money comes through.”

More details soon on how these grants can be accessed by businesses and what it means for the restaurant industry at large.

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