Tougher tier restrictions could wipe out £7.8bn worth of trading in December

By James McAllister

- Last updated on GMT

UKHospitality warns tougher tier restrictions could wipe out £7.8bn worth of trading in December

Related tags Coronavirus tier system

UKHospitality has warned that the landscape of the sector will be 'fundamentally degraded for the foreseeable future' if the Government fails to provide businesses with further financial support.

Following Health Secretary Matt Hancock's announcement earlier today (26 November) on which areas and regions in England will head into which tier following the lifting of the national lockdown next Wednesday​ (2 December), the trade body says that 98% of UK’s hospitality trade will be at the mercy of tougher Coronavirus measures.

It adds that should the restrictions last the entire month of December, an estimated £7.8bn worth of trading will be wiped out across the sector when compared to 2019.

Hospitality businesses across large swathes of northern England and the Midlands, including in Manchester, Lancashire, Newcastle, Birmingham and Leicester, will be forced to remain locked down under Tier 3.

According to real estate adviser Altus Group, more than 31,000 pubs, bars, restaurants and cafes will be subject to the toughest restrictions​, which only permit hospitality businesses to operate for takeaway and delivery. 

Other areas heading into Tier 3 include Bristol, Leeds, Hull, City of Wolverhampton, Blackpool and Coventry.

London will remain in Tier 2, meaning hospitality businesses will be able to open, but wet-led pubs and bars unable to serve a ‘substantial meal’, must close.

Meanwhile Liverpool, which was in Tier 3 prior to the lockdown, will move down into Tier 2.

The Isle of Wight, Cornwall and the Isles of Scilly are the only areas in England to remain in Tier 1, under which hospitality can continue operating with limited restrictions including an 11pm curfew on operating hours.

“The new tier system will deliver another huge blow to hospitality," says Kate Nicholls, UKHospitality chief executive.

“These are safe spaces for people to meet, relax and socialise and the sector is desperate to get staff back to work, open their doors and, in the long term, diminish reliance on the public purse and begin driving economic recovery.

“Over 120,000 venues across England will be placed into Tier 2, with tens of thousands of these forced to close as they are unable to provide a table meal, either physically or financially; this affects the employment of nearly 1.5 million people.

"Under this severe a restriction, 94% of our members say they will be unviable or trading at a loss."

Nicholls adds that the trade body has still not seen any evidence that hospitality venues, which have invested great time effort and money to making their spaces Covid secure, are a problem area in terms of infection.

She cites to a recent UKHospitality survey, which showed that 72% of visitors to hospitality were satisfied with the safety of the venues they visited, compared to just 11% who were not.

“It is now more vital than ever that the Government provides urgent further financial support for this sector. If it does not, we are looking at huge numbers of job losses, businesses permanently closed and the landscape of hospitality in this country fundamentally degraded for the foreseeable future," continues Nicholls.

“If we want to see businesses survive, then we desperately need a replacement for the Job Retention Bonus Scheme and for the Government to extend the rent moratoria and broker a solution to tackle the issue of rent debt that has built up.

"And if we want to give those businesses that do survive this winter a better chance at succeeding next year, then the VAT cut and businesses rates holiday must now be extended and grants provided to support businesses paid out at the earliest opportunity.”

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