The chief executive of Shepherd Neame, Jonathan Neame, says the government’s new restrictions will cause “biblical” levels of redundancies and that its curfew is based, not on evidence, but “a basic prejudice that people after 10pm are too drunk to look after themselves."
Shepherd Neame runs 320 pubs in London and the South East. It has 4,500 staff, 350 of whom are still furloughed. Jonathan Neame says he will have to start letting people go unless the government extends or replaces the furlough scheme.
The infection rate of Covid-19 is demonstrably rising and the government clearly believes that transmission between people in pubs and restaurants is a factor.
The evidence to support this view is limited. Public Health England publishes a weekly breakdown of coronavirus cases, based on test and trace data.
'Biblical levels of redundancies'
The latest numbers suggest around 5% of infections happen in food outlets/restaurants, the majority are reported in care homes and the workplace.
Hospitality venues appear only to responsible for a small proportion of cases but not all infections will be picked up by test and trace and the spike must be coming from somewhere.
The data is essentially inconclusive - it neither proves or disproves that pubs and restaurants are playing a role.
This is not a return to lockdown - although it probably feels like it if you work in the hospitality industry. The prime minister described the new restrictions as “carefully judged” but they don’t come with any additional financial help for the businesses who will inevitably be affected.
The Job Retention Scheme comes to an end in five weeks and the chancellor seems determined not to prolong its life.
There will still be support on offer, in the form of cuts to business rates and VAT, local grants and the government’s Job Retention Bonus, but UK Hospitality is warning that businesses will fail and jobs will be lost unless the government digs deeper.
Whitbread’s decision this morning to let up to 6,000 people go is clearly timed to coincide with the end of the Job Retention Scheme. 98% of the group’s Premier Inn hotels have reopened but sales are 20,000 of the company’s workforce and remain on ”flexible furlough - 14% of the wage bill is currently being subsidised by the taxpayer.
The new restrictions will be devastating for pubs, restaurants and cafes, in city centres in particular. They are also likely to slow the wider economic recovery, which until now has looked pretty vigorous, albeit uneven.
A second wave is here and economists are scrambling to revise down their forecast, although probably not by very much.
A national lockdown has been avoided for now, schools remain open, most businesses shouldn’t be directly affected by the measures and we’ve proved in the last six months that working from home is possible.
The Governor of the Bank of England, Andrew Bailey, has indicated that the outlook the Bank published in August is probably too optimistic. Capital Economics believes we’re heading sideways rather than backwards.