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Hospitality Lobby Says Government Coronavirus Restrictions ‘Lack Any Sliver of Logic’

UK Hospitality’s Kate Nicholls has called for three urgent support measures to “save businesses”, “prevent unemployment”, and avoid “bloodbath” on the high streets

View of a High COVID Alert Level sign at a restaurant window... Vuk Valcic/SOPA Images/LightRocket via Getty Images

The U.K.’s principal trade representative and lobby organisation for the restaurant and pub industries has lambasted Boris Johnson’s new tiered coronavirus restrictions for lacking any “sliver of logic” and for “unfairly penalising hospitality.” It has called for urgent financial support to mitigate losses over the Christmas period and into the new year.

The announcement came after what it called the Prime Minister’s “derisory” £1,000 gesture for pubs forced to close because they do not offer “substantial meals,” which he revealed in the House of Commons this afternoon.

Because those restaurants and pubs that are able to open will be doing so only for customers from the same household indoors, the trade body says it wants to see, at a minimum, three measures introduced “to avoid catastrophic failures and widespread job losses” after it has forecast a £7.8 billion drop in trade for the whole of December, the equivalent of 70 percent of revenue in the same period last year.

The three measures include:

  1. “Urgent, targeted replacement of the £1,000 Job Retention Bonus”. Businesses were promised a bonus payment of £1,000 for every member of furloughed staff retained into 2021. That policy fell victim to the government’s extension of the furlough scheme at the end of October, announced alongside the second national lockdown. UK Hospitality says this has left a “£2.1 billion black hole in the finances of hospitality businesses, severely risking the solvency of many” and urges the Treasury to reward businesses for retaining its workers.
  2. “Extension of the rent debt moratoria”— the perennially unsolved issue of what happens to all the unpaid rent is at some stage going to have to be confronted. Until it is — whether through grants, cancellations, or tailored turnover solutions into the future, the only thing the government has done and the only thing UK Hospitality is asking for today is for another delay. Landlords are legally prevented from kicking out restaurant tenants who owe monies because of COVID-19 until the end of the year. The trade body, having had its own proposals on the matter ignored, says this protection against eviction must be extended until the end of June 2021. If it isn’t, it predicts the new year will be “a bloodbath on the high streets.”
  3. “Compensation of businesses for losses” — the trade body is suggesting the U.K. government take a leaf out of the German and French support measure book, by introducing a compensation package that might amount “to a proportion of the drop in sales compared to verified accounts in 2019.” Or, compensation which is commensurate to that which has been lost. In other words, more than £1,000.

In order to assist the rebound of businesses, the body has also called for the extension of two other cost-saving support measures: the VAT cut; and the business rates holiday — both for the whole of 2021. The trade body warned that nine months of business support (through grants) and job protection (through furlough) could be wasted if measures weren’t put into place.

With those proposals is a marked change rhetorical tone from chief executive Kate Nicholls, who said that the government’s “entire approach to [new restrictions] lacked any sliver of logic, as evidenced by the farcical debate around Scotch eggs over the past 24 hours.” She added there needed “to be a much clearer and supportive approach from the government and this means providing far more support immediately.”

Nicholls said that the new tier system meant 90 percent of hospitality businesses would be unviable by the new year. “This is not just a threat to community wet led pubs but also neighbourhood restaurants [...] and other hospitality venues who are now staring failure in the face,” she said.

Nicholls pointed out that Johnson himself said that he was asking hospitality to “bear a disproportionate burden to allow the reopening of all other parts of the economy” and pay for Christmas. But, Nicholls said, “the compensation is derisory,” later pointing out that it was “vital that [the government] bring forward a more comprehensive package of emergency and long-term support to stave off the collapse of the third largest sector and export earner — a sector vital to our economic recovery.”

Without a minister representing the interests of hospitality in government, the third largest industry in the country has had a hard time having its case heard since the beginning pandemic. More, one of the effects of the government’s reactive and inadequate policymaking has been that it’s limited the ability of trade and lobby bodies like UK Hospitality to remain on the front foot and fill the policy vacuum. Like restaurateurs themselves, their trade reps have always been left with little time to digest announcements, and less time still to lodge their criticisms and publish counter proposals. And because the government has always been reactive — at once trying to balance public health needs in the short term and balance the public finances in the long-term, all while trying to play damage limitation in the arena of public opinion — it has bungled all three and ensured the debate around hospitality restrictions has centred on either perceived scapegoating or ridiculous distractions.

This has kept the business owners, workers, and suppliers who make up the industry in a damaging and exhausting cycle of uncertainty since March. That cycle doesn’t look like it’s going to break before and into the new year.