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One in four nightclubs ‘will not survive’ four-week lockdown extension

The four-week lockdown extension puts 300,000 jobs at risk, hospitality experts said, calling for tax relief and a furlough extension
Boris Johnson has "switched the light off" on the nightlife economy in the latest lockdown extension, businesses said. Image: Pexels

The UK’s hospitality and nightlife sectors have called for urgent action to keep bars and clubs afloat during the lockdown extension, with the reopening delay expected to cost the industry £3bn over four weeks.

Boris Johnson announced Covid-19 restrictions – which were due to lift in England on June 21 – will remain for another four weeks, until July 19, to ensure more people are vaccinated by the time social distancing ends.

The reopening would have allowed nightclubs and festivals to reopen after 15 months. But Chancellor Rishi Sunak will not create new targeted support for bars or extend the furlough scheme, set to be phased out from July 1, despite pleas from across the hospitality and nightlife sectors which now have to scale back re-opening plans with one week’s notice.

“The hospitality sector has already lost more than £87bn in sales in the pandemic leaving businesses deeply in debt and at risk of suffering “economic long Covid” without further support,” said Kate Nicholls, chief executive of trade association UKHospitality.

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“Our businesses face incredible levels of debt and will now face a huge cost hike, with business rates payments set to recommence and rent accruals due at the end of the month.

“The decision to delay is hugely disappointing but the government has judged the evidence and acted as it sees fit,” she added. “It does, however, jeopardise the return on investment that the government has afforded hospitality and it’s crucial that further support is announced to push us over the line.”

The four-week lockdown extension will put 300,000 jobs at risk, Nicholls warned, and cost the hospitality sector £3bn in sales, with businesses guaranteed to “fail” if the Chancellor does not do more to help struggling venues.

“Getting this far will count for nought,” she added, calling for the business rates holiday to be extended and a public commitment from ministers to support the sector through the delay.

Michael Kill, chief executive for the Night Time Industries Association (NTIA), called the lockdown extension “a hugely devastating blow for the very industries that have been hardest hit by this pandemic”.

One in four nightlife businesses expect to have to close for good as a result of the four-week delay, research by the NTIA showed.

The prime minister has “switched the lights off” on the sector, Kill added.

“Many businesses have not survived this pandemic and others are on a financial cliff-edge, unable to operate viably. Hundreds of thousands of jobs have already been lost, a huge pool of creative talent has been swept away, and we have been left to suffer extreme financial hardship.”

The delay will worsen the hospitality staff shortage, Kill warned, and force people to attend “illegal unregulated events” in place of regulated, licenced businesses.

Nightlife and hospitality businesses are “overburdened with debt”, the chief executive said, calling for a new financial support package including grants, tax relief and an exemption from the requirement to contribute to furlough payments.

“The government must understand the human impact of this decision, not only considering the public health challenges of the virus but also the people within our sector who are suffering terribly and the real health risks that this represents.”

Despite most bars being able to operate under current restrictions, social distancing and limits on capacity mean the next four weeks will cost them £400m, according to the British Beer and Pub Association.

“Every week the current restrictions stay and uncertainty continues, the likelihood of pubs being lost forever increases,” said Emma McClarkin, chief executive for the organisation.

“Our pubs require as a minimum an immediate three-month extension to the business rates holiday, the ability to defer loan payments due now and a further extension of VAT support.

“Grants for businesses particularly affected, such as those pubs who cannot still reopen because of the current restrictions, must now also be put in place.”

The rime minister said restrictions will be reviewed in two weeks but warned it was “unlikely” social distancing would end before July 19.

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