Tuesday, 27 Oct 2020

Lockdown crisis: Could pubs and restaurants shut again?

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At the start of the lockdown hospitality businesses were forced to close in March, and were only allowed to reopen in July. After months of closures the Government promoted the Eat Out to Help Out scheme, to encourage people to dine in at restaurants and help the sector to recover. However, the industry has suffered another blow today (Tuesday, September 22), as Prime Minister Boris Johnson announced new coronavirus lockdown measures for the hospitality sector will be implemented this week.

What are the new lockdown measures for hospitality businesses?

Mr Johnson announced today in the House of Commons hospitality businesses will have to close by 10pm every night to halt the spread of the virus.

All premises will also have to operate table service only, except for takeaways, as of Thursday, September 24.

The PM said it means “closing, and not just calling for last orders”.

The rules of face coverings have also been extended, as staff and customers in indoor hospitality will also be required to wear face coverings – except when seated at a table to eat or drink.

Could pubs and restaurants shut again?

At the moment the Government is not suggesting restaurants and pubs close as was witnessed earlier this year.

But the Prime Minister told the House of Commons on Tuesday another full lockdown was possible if the new measures fail to be effective.

Mr Johnson told MPs: “We reserve the right to deploy greater firepower, with significantly greater restrictions.”

What will the impact be on hospitality businesses?

Business experts have called for the Government to extend support to businesses affected by the new measures announced today, as support such as the furlough scheme is expected to end in October.

Dame Carolyn Fairbairn, director general of the CBI, said: “A second national lockdown would be devastating for our economy, so it’s right to prioritise bringing infections under control.

“But there can be no avoiding the crushing blow new measures bring for thousands of firms, particularly in city centres and for our hospitality sector employing over four million people.

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“It is vital that all announcements of restrictions go hand in hand with clarity on the business support that protects jobs.”

George Charles, spokesperson for www.MoneySavingHeroes.co.uk, said it is a “deeply worrying” time for hospitality businesses.

He said: “The job losses that this could cause will be catastrophic, as we have already seen with Wetherspoons announcing that they will have to cut jobs.

“This will only negatively affect the confidence that consumers have in the safety of pubs; just because the pub closes before 10 doesn’t mean you are less likely to contract the virus.

“It’s likely pub-goers will now feel far less comfortable even setting foot in their local as coronavirus cases spike.

“There is a fine line between stabilising the economy and keeping people safe, and of course the health and wellbeing of the public should come first, but we may see mass closures as businesses lose that vital custom that is helping them keep their head above water at the moment.

“It is deeply worrying times for the hospitality industry and there appears to be no end in sight.”

Russell Nathan, hospitality expert at accountancy firm HW Fisher, commented the new restrictions are “another blow” to an industry which has been “patient and flexible” during this period of hardship.

He said: “No doubt they will pivot successfully again to encourage earlier evening meals, but with distancing and the weather closing in, the outlook is simply not economically viable.

“Combined with the message to work from home again, restaurants in central London who had started to see some encouraging signs after the success of Eat Out to Help Out will find themselves on the back foot again.

“Restaurants, pubs and caterers are going to face challenging times again, and they will need additional financial assistance from the government, for example, rent breaks and an extension of furlough in order to make it through another potential six months of these restrictions.”

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