Businesses warn of wipeout if national lockdown returns

20 September 2020, 07:25

Businesses are calling for more support as a second wave looms
Businesses are calling for more support as a second wave looms. Picture: PA

By Ewan Somerville

Business leaders have warned they face wipeout as fears grow that a second national lockdown may be needed to stem the surging rates of coronavirus. 

Some 900,000 jobs are on the line in the hospitality industry alone, industry chiefs said, while the travel sector is also sounding alarm bells. 

Pub chains and devolved leaders are demanding action and warning they face the perfect storm of fresh national curbs combined with the winding down of the furlough scheme at the end of October. 

It comes after Boris Johnson warned the UK is “now seeing a second wave” of Covid-19, adding it was “inevitable” that it would arrive. Some 13.5 million Britons are already in local lockdown.

The Prime Minister said he wanted to avoid another national shutdown, but it is understood he is considering national restrictions on a par with the North East - where pubs and restaurants must now abide by a 10pm to 5am curfew - or a more extensive “circuit break” lockdown with only essential travel to schools and workplaces allowed. 

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However, some have looked to Sweden, where no national lockdown was enforced and shops, bars, restaurants were allowed to remain open. The Nordic nation has a fortnightly case rate of just 22.2 per 100,000, compared to 279 in Spain, 158.5 in France, 118 in the Czech Republic, 77 in Belgium and 59 in the UK.

Data from Sweden’s national health agency showed only 1.2% of its 120,000 tests last week came back positive and its seven-day average of Covid-19-linked deaths is zero. 

The country of 10 million people only closed schools for over-16s, keeping younger year groups in for full attendance, shielded the over-70s and banned gatherings of more than 50 people - but did not recommend the wearing of face masks and left social distancing as an option, not a rule. 

One option presented to Downing Street was a national lockdown in the October half-term holiday - prompting the chain Greene King, which owns a stable of 2,700 pubs, restaurants and hotels, to join Labour’s intensifying calls for Chancellor Rishi Sunak to extend the furlough scheme.

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The firm said the pub sector is “fighting for survival” and that the 10pm curfew in place across the North East would “cause further damage” if rolled out more extensively, especially in London. 

Meanwhile Tim Martin, boss of pub chain JD Wetherspoon which employs 43,000 people, said any further restrictions would be “even more devastating”, after a boost afforded by the Government’s Eat Out to Help Out scheme in August. 

London mayor Sadiq Khan said further curbs in London were “increasingly likely”, perhaps mirroring those in northern England, and that he was “of the firm view that we should not wait” as the capital’s infection rate per 100,000 people rose from 18.8 to around 25.

Kate Nicholls, chief executive of lobby group UK Hospitality, told the Sunday Times: “There are 900,000 people currently still receiving full furlough: that is the quantum of jobs at risk, given that furlough runs out in October and you would need to start redundancy discussions in the next couple of weeks.

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“We need to have a grown-up debate with government about the measures needed. There is no certainty that this would be the only lockdown. We need a plan to get us through the next six months.”

She is also calling for an extension on the Treasury’s business rates holiday and the slash to VAT, from 20% to 5% which ends on 12 January. 

Meanwhile, devolved leaders have called for the UK Government to step in “urgently” to help the beleaguered aerospace sector and said a taskforce should be set up. 

In a joint letter signed by the union Unite, Nicola Sturgeon, Mark Drakeford and Arlene Foster - first ministers in Scotland, Wales and Northern Ireland respectively - said “further damaging losses” were facing aviation employers.