UK

Business leaders despair at new restrictions and it say ‘will be much harder to survive’

Boris Johnson’s new raft of restrictions have dealt ‘a devastating blow’ to business communities, the head of British Chambers of Commerce has said.

Industry leaders insist it will now be ‘much harder’ for firms to survive, even as the much-trumpeted furlough scheme was extended for another month, and have pleaded with the government to fix testing to avoid a third lockdown.

After weeks insisting he is sticking to local restrictions, the PM completed a humiliating U-turn tonight by announcing blanket coronavirus restrictions for England at a press conference alongside medical and science chiefs Chris Whitty and Patrick Vallance.

The draconian measures – being billed as ‘Tier Four’ on the government’s sliding scale – come into force from midnight Thursday morning after bleak Sage modelling projected the virus could kill 85,000 this winter, far above the previous ‘reasonable worst case’.

The brutal squeeze will see non-essential shops in England shut until December 2, as well as bars and restaurants despite the ‘absolutely devastating’ impact on the already crippled hospitality sector.  

It emerged earlier this month that the UK economy grew by just 2.1 per cent in August as the recovery from the pandemic’s impact stalled despite Rishi Sunak’s Eat Out to Help Out scheme – down on the 6.4 per cent expansion recorded in July.

The Prime Minister described the pandemic as ‘a constant struggle and a balance that any Government has to make between lives and livelihoods, and obviously lives must come first’.

He added: ‘I’m under no illusions about how difficult this will be for businesses which have already had to endure such hardship this year and I’m truly, truly sorry for that – and that’s why we’re going to extend the furlough system through November.

‘The furlough system was a success in the spring, it supported people in businesses in a critical time. We will not end it, we will extend furlough until December.’ 

Adam Marshall, director general of British Chambers in Commerce said tonight market confidence has been ‘hit hard by the unclear, stop-start approach’ taken by governments across the UK during the pandemic.

He said: ‘Many firms are in a much weaker position now than at the start of the pandemic, making it far more challenging to survive extended closures or demand restrictions.’

Boris Johnson’s new raft of restrictions have dealt ‘a devastating blow’ to business communities, the head of British Chambers of Commerce has said

The latest data published by the Office for National Statistics suggests the UK's V-shaped recovery from the coronavirus crisis is slowing

The latest data published by the Office for National Statistics suggests the UK’s V-shaped recovery from the coronavirus crisis is slowing

Prime Minister insists ‘lives must come before livelihoods as shops, pubs and restaurants ordered to close 

The Prime Minister described the pandemic as ‘a constant struggle and a balance that any Government has to make between lives and livelihoods, and obviously lives must come first’.

But he told the press conference: ‘We have to be mindful the whole time of the scarring the long term economic impact of the measures we’re obliged to introduce.’

Defending the choice to initially go for ‘the regional approach’, Mr Johnson said: ‘In common with many other parts of this continent we’ve just seen an overall growth rate in the second wave and it has made it absolutely vital to act now to spare to protect our NHS and to save lives.’

He added: ‘Yes it is true that the course of the pandemic has changed and it’s also right that the Government should change and modulate its response in accordance, and I make absolutely no apologies for that.’

‘The temporary extension of the furlough scheme will bring short-term relief to many firms, and responds to Chambers’ call for business support to be commensurate with the scale of the restrictions imposed. 

‘The full financial support package for businesses facing hardship, whether through loss of demand or closure, must immediately be clarified and communicated. 

‘Sustained help must be available to employers, to the self-employed and to the many businesses and individuals that have not been able to access any of the government’s schemes to date.

‘The Government must not squander the time afforded to them through another lockdown to enable mass testing and fix Test and Trace systems – which hold the key to a lasting exit strategy for both public health and the economy.

‘We will be examining the detail of new restrictions and support carefully over the coming days, together with Chamber business leaders across the country. 

‘Business communities will judge them on whether they are clear and evidence-based – and on whether businesses are able to see when these restrictions may come to an end.’

Non-essential shops must close from Thursday as part of the new measures, which leaders have blasted this evening.

Helen Dickinson, Chief Executive of the British Retail Consortium, said: ‘Retail faces a nightmare before Christmas as the Government proposes to close thousands of retail premises under this new national lockdown, denying customers access to many of their favourites shops and brands. 

‘It will cause untold damage to the high street in the run up to Christmas, cost countless jobs, and permanently set back the recovery of the wider economy, with only a minimal effect on the transmission of the virus.

‘A recent Sage paper reported that closing ‘non-essential’ retail would have minimal impact on the transmission of Covid. This is thanks to the hundreds of millions of pounds retailers have spent making their stores Covid-secure and safe for customers and colleagues.

‘The announced closure will have a significant economic impact on the viability of thousands of shops and hundreds of thousands of jobs across the country. The previous lockdown cost ‘non-essential’ shops £1.6 billion a week in lost sales; now that we are entering the all-important Christmas shopping period, these losses are certain to be much bigger.

‘We have no doubt that retailers will comply with the rules and play their part to ensure the British public can remain safe and have access to the goods they need. Nonetheless, Government must also play its part, providing support to businesses that will be forced to close, otherwise the consequences for local retail will be dire.’

Pubs and restaurants will also close under the new lockdown plans, and the Campaign for Real Ale has called for further support to be provided while doors are shut.

National chairman Nik Antona said: ‘The second lockdown is a devastating blow for an industry that is already on its knees. Pubs across the country have already invested thousands to reopen COVID-safe environments despite facing seriously reduced incomes. 

‘The Government must introduce a support package for all pubs and breweries – regardless of their current rateable value – and extend the furlough scheme for the full period of lockdown. 

‘We also need a clear route map out of lockdown which is based on evidence, otherwise we will see many pubs and breweries close their doors forever.’  

Pubs and restaurants will close under the new lockdown plans, and the Campaign for Real Ale has called for further support to be provided while doors are shut

Pubs and restaurants will close under the new lockdown plans, and the Campaign for Real Ale has called for further support to be provided while doors are shut

A spokesman for UKHospitality added: ‘Public health objectives are, rightly, the motive for the new measures, and for that reason we entirely support whatever proportionate action is necessary.

‘The costs to hospitality businesses of a second lockdown will be even heavier than the first, coming after periods of forced closure, the accumulation of mass debt and then significantly lower trading due to the restrictions of recent weeks. The sector was hit hardest and first, and this recent shutdown will hurt for months and years to come. The extension of furlough for a further month does help to protect our workforce during this difficult time.

‘If hospitality, the sector that is our country’s third largest employer, is to survive and help drive economic recovery, it will need equivalent – or more – support than that of the first lockdown.

‘Hospitality businesses have already been pushed to the limits, with many closures already. For those that have survived, viability is on a knife edge, as is the future of the tens of thousands of businesses and hundreds of thousands of jobs that depend on hospitality, including through its supply chain, right across the country.

‘It is critical that businesses are given a lifeline to survive the winter, before being given the support to enter a revival phase in 2021, as the nation’s prospects improve. A clear roadmap out of lockdown and through the tiers will also be vital for businesses to plan their survival, and the safeguarding of hundreds of thousands of jobs.

‘It is important to remember that some parts of hospitality, such as nightclubs, have not even been allowed to re-open. The support for those, now that potential reopening has been kicked further into the future, must be redoubled to ensure that they are not lost forever.’

Michael Kill, chief executive of the Night Time Industries Association, said: ‘The announcement from the Prime Minister today will leave night time economy businesses facing a ‘financial armageddon’. It is the most horrific of Halloweens.

‘It’s frightening to think that given the gravity of the situation, we are still being given limited communication, consultation or time to respond, or plan around these decisions.

‘The entire night time economy consisting of thousands of businesses and hundreds of thousands of workers are suffering.

‘Their plight is being made even worse by the huge void in financial support for the sector.

‘Many of our businesses have experienced extreme financial hardship, been presented with unmanageable operational measures and have in some cases been forced into complete closure since March.’

Elsewhere, Jace Tyrrell, chief executive of New West End Company, described a lockdown of non-essential travel and retail as ‘a true nightmare before Christmas for West End retailers’.

The West End employs one in 10 Londoners, and this year’s run up to Christmas is shaping up to deliver ‘some of the most difficult trading periods we’ve ever experienced’, he said.

Mr Tyrrell added: ‘Many jobs have already been lost, and many more are at risk, unless trading levels increase or furlough is reinstated.

‘In addition to emergency support to cover lost wages, the Government must make an immediate announcement that it will maintain essential support measures such as continued business rates relief after April next year.

‘Retailers and the public need to be reassured that there is light at the end of the tunnel, as continued uncertainty and stop-start measures are undermining confidence and worsening an already catastrophic situation.’ 

Charlie Mullins, founder and chairman of Pimlico Plumbers, said: ‘With this latest lockdown the business community has been sold down the river by a government that is supposed to be on our side, and I thought understand that the wellbeing of the nation depended on the survival of the economy.

‘Sadly, Boris has lost track of these basic Conservative principles and has crumbled under the pressure of the job and the scientific voices whispering in his ear.

‘He also looks like he’s playing politics with the livelihoods of the south of England by imposing a national lockdown instead of adding a fourth tier to the worst parts of the country.

‘The Government is so desperate to curry favour in its newly won over north that it is chucking a net over us all to avoid being accused of favouring London and the south, over the areas where the virus is truly out of control.

‘Boris would do well to remember where his constituency is.’

Derek Cribb, chief executive of IPSE (the Association of Independent Professionals and the Self-Employed), said: ‘Government must urgently fix the unfair disparity between employee and self-employed support.

‘Right now, the self-employed can claim just 40% of their earnings compared to 80% for employees through the extended furlough scheme. This cannot stand as we enter a second national lockdown.

‘Crucially, Government must also make sure it extends the Self-Employed Income Support Scheme to all self-employed people. The gaps in support in the first lockdown – such as limited company directors and the newly self-employed – led to the biggest drop in self-employed numbers on record. Many thousands lost their freelance businesses and were driven onto Universal Credit.

‘Now, those limited company directors and other excluded self-employed who made it through on their savings face financial calamity if they do not get support in this second lockdown. Government must urgently increase the amount paid through SEISS and extend it so that all of the UK’s 4.6 million self-employed are supported.’

 

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