Businesses have warned that the UK government is at risk of “falling into the last hurdle” after it refused to wait for key coronavirus support programs to begin by the end of the month.
Prime Minister Boris Johnson’s decision to delay the final period of ending the lockdown by a month means many businesses – including nightclubs, music festivals and cinemas – will not be able to open before the end of July. Pubs and restaurants will continue to operate with limited capacity.
Companies have faced a return in significant costs since the start of July even as they are strongly forced to remain closed. Along with that is a step back in business rates, a tapering of the furlough scheme and the end of an unpaid eviction ban. The Treasury clarified that it would not add to the existing support package.
Kate Nicholls, head of industry group UKHospitality, who estimates the delay will cost the sector £ 3bn in sales, said many businesses have “reached the end of the road… It is [the government] fell the last hurdle ”.
Demand for low business rates on July 1 hit many businesses at a time when they ran out of money, he said.
Alex Proud, founder of Proud Group, which operates three cabaret venues, described the government’s decision-making as a “shitshow” that confronted nightclub executives facing growing crowds. debt they cannot pay. Proud took out £ 1.5m of debt during the crisis to survive – “most of us are in the last few cents”, he said.
Several clubs, including the 1,600-capacity Cloth in central London, have booked several opening festivals for the weekend of June 26. The Night Time Industries Association says a fifth of businesses are it represented losing £ 40,000 per week on the increased lockdown. Chief executive Michael Kill said Johnson was “turning off the lights” for an entire sector.
Sir Howard Panter, who runs theater company Trafalgar Entertainment, said he faced having to abandon a production of Jersey Boys at the Trafalgar Theater, there was a risk of cutting the work of actors and staff.
“We may have to drop people, we may have to turn our backs on the whole show. And will the government pay us for the millions invested to make sure we can run? You bet your low dollar isn’t.”
He added that if the prime minister had positive comments about the road map, many businesses would bank on continuing to open. “How long does this go on? In four weeks time we said we had to see another load of businesses collapse. ”
The delay also threatens the usual British festival. Hertfordshire’s 17,000-strong Standon Calling festival is still set to feature bands from Hot Chip to Primal Scream this summer-but with an opening date now just days after the latest founder of the lockdown extension Alex Trenchard who is said to be ”. He said the main problem was the lack of any insurance to cover the sudden cancellation.
The Association of Independent Festivals says that without government action to support an insurance scheme most of the remaining 2021 festivals in the UK could be canceled.
Michael Gove, minister in the Cabinet Office, said on Tuesday that the postponement had been “tried” but argued it would be even worse to reopen and then force companies to close in a few weeks.
Asked if the new opening date also on July 19 could still be delayed, he said: “It will take an unprecedented and surprising turnaround in the progression of the disease.”
A Treasury source said the government is “committed to helping businesses and individuals through the pandemic” and that current support “will use the right balance of the economy that has already begun to grow with our opening up as well and the intensification of the job market is looking to have fewer than 2m people now in furlough ”.
The British Beer & Pub Association said the delay would cost pubs £ 100m a week due to the continued imposition of restrictions on social exclusion.
The trade body warned of another “lost summer for pubs”, and called for an additional support package to find many difficult areas for the rest of the year.
Nick Mackenzie, chief executive of pub group Greene King, says taxpayers will lose value from football fans who want to watch the Euro 2020 tournament.
The end of the business price holiday on June 30 will increase Greene King’s costs by £ 250,000 a day, he said, “at a time when we will lose millions every day in sales due to capacity constraints. “.
Office occupants also said they need to rethink plans to get people back to workplaces. KPMG says a “four -day two -week” hybrid work plan is planned to begin on June 21, but the continuation will “see our approach, and we will start our plans if it is deemed safe. to do. ”
However, some have already decided to reverse such a decision until after the summer, avoiding the need to change as government instruction changes. EY said the offices remain open but are expected to move to the longest -running hybrid working model from September once the social distancing curbs are removed.
Proponents of the event have stepped up government pressure on insurance
The UK Treasury could lose more than £ 700m in lost VAT receipts unless the government further underwrites music festival and live industry activities during the pandemic, experts warn in insurance.
Calculations about the industry’s efforts show that the government has no vision by the lack of underwriting to cancel insurance for live events left in commercial limbo on Covid-19 and Monday. delay the end of the lockdown in England.
The Association of Independent Festivals (AIF) calculated in May that 26 per cent of festivals had more than 5,000 people. canceled, with several citations of the lack of available insurance available as a reason to pull the plug.
Paul Reed, AIF chief executive, said insurance was needed to give promoters the confidence to continue events after July 19 – the new target date to get all the remaining coronavirus curbs. . Reed added that the government faces a “political choice” on whether to support the sector or push it towards a financial “cliff-edge”.
The analysis by Tysers, insurance brokers, and Riskspace, which provides risk management software to keep event organizers alive, calculated that, if all activities go ahead, the festivals could provide more than £ 9bn in economic value added next year, generating a potential £ 708m in VAT receipts as a full 20 per cent VAT rate for hospitality – which was reduced to 5 per cent during the pandemic – slowly returning from September.
Proponents say insurance is important so they can keep up with events, with most of the funds being spent six weeks straight before they happen.
The Department for Digital, Culture, Media and Sport says it is working “flat out” to support festivals and live events. It added that ministers “are aware of greater concern about ensuring fee coverage for live events” and explored “how much more support is needed” if the festivals are able to. to begin with as well.
Peter Foster of Brighton