Tens of thousands of hospitality venues face closure without support, warns Labour

By James McAllister

- Last updated on GMT

Tens of thousands of hospitality venues face closure, warns Labour

Related tags Coronavirus

The Labour Party has warned that tens of thousands of hospitality businesses face closure if Chancellor Rishi Sunak fails to step in and support struggling firms.

With the surging Omicron Covid variant leading restaurants and pubs to face huge numbers of cancellations​, Labour analysis of data from the Office of National Statistics (ONS) shows that one in every five businesses are at risk of going under, with one in three reporting lower festive sales. 

Labour adds that this analysis covers the month before Omicron hit, suggesting things could get even worse for the sector as parties are cancelled and orders dry up.

The data corelates with analysis provided by trade body UKHospitality​, which warns it is currently seeing a 25% reduction on expected trade, with industry bosses expecting a further drop of around the same as Christmas draws closer.

Meanwhile, Wireless Social’s latest footfall data, pulled from its network of venues, indicates that last week’s Plan B announcement​, which saw working from home guidance reintroduced and NHS Covid Passes become mandatory, has had a significant impact on consumer confidence, resulting in a drop off in hospitality sector footfall.

Hospitality venue visits were down by 35% on Monday, 34% on Tuesday and 31% on Wednesday (13-15 December) in comparison to the same period in 2019.

This pattern is even clearer in London, where log-ins were down by 43% on Monday, 44% on Tuesday and 45% on Wednesday, compared to the same period in 2019.

“It’s clear that consumer confidence has plummeted ahead of what was meant to be a return to normality and a well-deserved booming period for hospitality operators," says Julian Ross, founder and CEO of Wireless Social.

"We’re seeing wave after wave of cancellations across the sector, which is completely understandable. However, it is absolutely essential that the industry gets financial support from the Government, as without it the impact on businesses will be catastrophic.”

Labour are also calling for financial support measures to be introduced, and has set out its own plans to help businesses through this tough period, with action to ease the burden of debt repayments, cutting business rates for small businesses, and creating a 'functioning system' of self-isolation support.

It comes as the Chancellor faces criticism for taking a trip to California this week while the sector wrestled with the downturn in trade, leading voices from across hospitality and beyond to accuse him of 'going into hiding​'.

“Every day the Chancellor is missing in action is an insult to the British businesses and workers who have struggled to get to this point," says Jonathan Reynolds, Labour’s Shadow Business Secretary.

“They are now facing closure by stealth from a Government without the authority to take the public health measures required and back it up with economic support."

Sunak to meet hospitality leaders

Last night (16 December) it was reported that the Chancellor would be cutting short his trip and will return to the Treasury today to hold talks with business chiefs over support measures.

It comes after Treasury ministers spoke with a range of hospitality and business organisations yesterday.

UKHospitality has already called on the Chancellor to keep VAT at 12.5%; suspend business rates payments for the first quarter of 2022; and reinstate recovery grants. There are also calls for a targeted return of the furlough scheme to allow companies to keep staff on the payroll.

According to The Guardian​, ​Treasury sources have indicated there was a mixed bag of requests and it was not clear yet which would be an effective and appropriate use of taxpayers’ money, suggesting an announcement was not likely in the next 24 hours.

Speaking ahead of his return to the UK last night, Sunak told Sky News​: "This Government has done whatever it takes at every stage to support lives and livelihoods throughout this pandemic - and of course we will continue to do so.

"We understand that this is a concerning time for businesses.

"Myself and my wider team met with business representatives earlier today, listened to their concerns and will continue to work with industry leaders over the coming days."

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