Video report by ITV News Political Correspondent Romilly Weeks
Nearly a quarter of pubs, restaurants and bars could go bust by the end of the year without additional government support, figures obtained by ITV News reveal.
The prediction comes as the government announced a 10pm curfew on hospitality firms in England from Thursday, and with furlough winding down by the end of October, it could prove to be a hammer blow for businesses and employees.
Chancellor Rishi Sunak is expected to give a statement on Thursday outlining government's approach to "continue protecting jobs through the winter" - the clearest sign yet some additional help might be given to some sectors of the economy.
It remains to be seen whether the hospitality industry could benefit from the announcement.
But the shocking findings from a survey of members of the British Beer & Pub Association, UKHospitality and the British Institute of Innkeeping reveal the problems the industry as a whole is facing.
Of those which said they could survive beyond the end of this year with the current levels of government support, a further 26% said they did not expect their businesses to survive beyond mid-2021 without additional help.
The survey’s findings also reveal the extent of job losses in the hospitality sector, which is estimated to employ around three million people in the UK.
One in eight hospitality staff have already been made redundant - with many more expected to lose their jobs once the furlough scheme comes to an end in October.
The British Beer & Pub Association, UKHospitality and the British Institute of Innkeeping have all called on the government to to extend the furlough scheme beyond October, extend the VAT cut and business rates holiday, as well as reduce the beer duty in the upcoming Autumn Budget.
Will a 10pm curfew work?
They say these measures could help any further disruption to operations and allow for a sustainable recovery moving into 2021.
Emma McClarkin, Chief Executive of the British Beer & Pub Association, said: “This research shows pubs and hospitality businesses were already teetering on the edge. Now the Prime Minister has announced even more restrictions for them, it is clear much more support will be needed from the Government to ensure they survive.
“An immediate stimulus package is required for our sector in the form of an extension to the furlough scheme and business rates relief, plus continuation of the VAT cut to food and soft drinks and a significant cut to the UK’s excessively high beer duty.
“Only by taking these measures can the Government save our pubs, hospitality businesses and as many as 750,000 jobs. If the Government doesn't act now it would be unforgiveable.”
Steven Alton, Chief Executive of the British Institute of Innkeeping, said: “Government support in our sector is an investment which will deliver strong returns economically, with skilled jobs and allowing our venues to continue to be at the centres of their communities across the UK."
He added: “We have fully played our part in this pandemic both in successfully delivering extensive changes to our venues to keep our staff and customers safe as well as delivering essential social value to communities across the UK.”
Dom Fernando, owner of restaurant Paradise Soho, says the impact could be 'catastrophic' on the hospitality industry
The 10pm curfew is expected to have an adverse affect on hundreds of thousands of businesses.
From small, local businesses to chains with hundreds of premises across the country, many firms have warned tough decisions will have to be made to preserve their business from going under.
Sam Hagger, founder and director of the Beautiful Pubs Collective, runs three pubs in Leicester, two which are licensed until 3am.
The policy announcement by the government has led to a rethink of opening hours which will undoubtedly harm his company's revenue.
“It’s going to be very difficult if you’re running a late night economy venue to encourage people to come out at 6pm, get dressed and meet with their friends, come out for three hours before trying to find a taxi to go home,” Mr Hagger said.
He added: “As a company, our turnover is about 70% of where we were before we closed (in March).
“We enjoyed 13 years of like-for-like sales growth. We came up with new opportunities every year to attract new customers but now that opportunity pool is dwindling. There’s only so many hours in the day we can trade.
“At the Knight and Garter pub, we were still seating guests at 9.45pm and the spend per head on those tables was really high, so instantly, even on last Saturday’s trade, we’re probably going to be looking at around 20% down on this this Saturday. Multiple that by x amount of days per week, its going to be a real problem.”
Independent restauranteur Andreas Antona, who owns the Michellin-star awarded Simpsons in Birmingham and The Cross at Kenilworth, said he faces similar problems.
Having employed around 100 people prior to the coronavirus pandemic, he has had to cut the number of staff by about a third due to social distancing measures.
With the 10pm curfew coming into force, he suggested his revenue could be hit up as much as 30%, which could lead to more tough choices when it comes to staffing further down the road.
The people who make the rules aren’t listening to what we are saying
“I agree this needs to be done in a safe manner, but why is there a blanket ban for 10pm for pubs and restaurants? They are very different businesses and it could be done in a way which works for everyone,” he said.
“The people who make the rules aren’t listening to what we are saying. It’s very frustrating.”
It isn’t just the small businesses which are feeling the pinch.
JD Wetherspoon, which operates nearly 900 pubs in England and Ireland, said the curfew is “counterproductive” and there were “very low infection rates in pubs”.
Tim Martin, chairman of the Wetherspoon, said: “A curfew will mean that supervised socialising in pubs will end at 10 pm and people are likely to socialise in their homes and elsewhere, where there is no supervision.
“As councillor Ian Ward, leader of Birmingham City Council has said: ‘The data we have shows that the infection rate has risen mainly due to social interactions, particularly private household gatherings.
“‘In shops and hospitality venues there are strict measures in place to ensure they are Covid-free, whereas it is much easier to pass on the virus in someone’s house.’”
And Greene King, the UK’s largest pub retailer and brewer, said fewer than 1% of its 1,700 managed pubs have been contacted by NHS Test and Trace since reopening in July.
Percentage of Greene King pubs contacted by NHS Track and Trace
Chief executive Nick Mackenzie said: “Pubs are just starting to get back on their feet after lockdown and these new restrictions are a significant setback.
“We urgently need the government to extend the furlough scheme for hospitality venues and confirm what additional support it will provide to protect jobs and the future of pubs.
“Removing a key trading period and further damaging customer confidence looks set to cost us several million pounds per week on top of already reduced customer numbers in our pubs to maintain social distancing.
“Given these restrictions and likely timescales we need support from government to avoid further job losses in the hospitality sector in addition to the 135,000 so far.”