Businesses demand further support as Boris Johnson delays easing of Covid restrictions

Companies facing a ‘cliff-edge’ as government support ends and large bills fall due while restrictions remain in place

The final stage of lockdown lifting has been pushed back by four weeks in response to rising case numbers (Copyright 2021 The Associated Press. All rights reserved.)

Business leaders in England have demanded more financial help after Boris Johnson pushed back the date for so-called Freedom Day when all Covid restrictions will end.

Hospitality industry figures warned that the delay from 21 June to 19 July would be “devastating” for a sector that has been among the hardest hit by the pandemic and which is being forced to operate below capacity during one of the busiest parts of the year.

The prime minister said on Monday that rising case numbers and the spread of the Delta variant of coronavirus meant it was “sensible to wait a little longer” and that the final stage of lockdown would be delayed by four weeks.

The delay means that pubs, bars and restaurants must continue to operate with social distancing measures in place which reduce capacity. Nightclubs will remain closed. Weddings and wakes can go ahead with more than 30 guests from 21 June when a limit on numbers of attendees will be lifted.

Mr Johnson said the government aims to have ensured all adults have received at least one dose of vaccine and everyone over 50 has been fully inoculated by 19 July.

Dr Roger Barker, director of policy at the Institute of Directors, described the announcement as "a blow" for businesses.

“We are now approaching a cliff edge, with government support for business ending or beginning to taper off,” he said.

"It is vital that this support is pushed out commensurately with the lockdown extension. Economic support and public health measures must be aligned.”

Businesses face a number of significant costs which will fall due in the next three weeks, after having been postponed or cancelled during the pandemic.

On 23 June, companies will be hit with quarterly bills and a ban on commercial rent evictions ends the following week.

On 1 July, employers must start contributing towards the cost of furloughed employees' wages. On the same day 100 per cent business rates relief tapers off to 67 per cent.

Philip Inzani, founder of Polo 24 Hour Bar, a venue in central London said it ahd become "near-on impossible" to plan for staffing levels.

"People are not waiting around, Brexit has also had a massive impact in terms of recruiting, there is a huge deficit of skills across the sector, especially back of house kitchens," he said.

Thousands of small businesses who have been relying on restrictions being eased will be impacted by the delay said, Gary Turner, co-founder & UK managing director of accounting platform Xero.

“The initial road out of lockdown timeline instilled confidence within the small business market, and our customer data showed green shoots of recovery as sales grew by 0.6 per cent year-on-year in April when averaging 2020 and 2021 monthly growth.

"However, our data suggests that 410,000 small business jobs must be created this year for the sector to return to the pre-pandemic job trajectory - and this extension continues to put pressure on the businesses who are running with reduced staff."

A poll by small business funding platform Iwoca found that 1 in in 3 SMEs report they’re sacrificing customer numbers in order to maintain Covid-secure workplaces – a quarter are making few sales.

Neil Pattison, Director at Caterer.com, the an online recruitment platform, was scathing of the timing of Boris Johnson's announcement.

“Once again this last minute announcement from the government will throw the hospitality sector and its people into further challenge," he said.

"Businesses have gone to great lengths to prepare for full reopening on 21 June, and this latest delay in the easing of restrictions will have debilitating consequences on the events and night time economy, as well as for the pubs, bars, hotels and restaurants that are still unable to operate at full capacity."

Sam Morgan, chief executive of Craft restaurant in Birmingham estimated that his business would lose £42,000 in revenue due to the delay.

“[That] means less staff back off furlough, which was not planned, and a delay in repayment of Covid support loans.

“There needs to be financial support by way of business rates, further reduction, additional grants, and exclusion of Employers’ National Insurance contributions for furloughed workers.”

The events industry will be particularly badly impacted by the prolonging of restrictions. Darren Stanley, chief of events planning and production company OnFyre.co.uk said the pandemic had completely shut down business.

"I spent £40,000 on my business just before the pandemic hit – on the website, marketing, equipment and sponsorship – this was completely wasted as no one could make any bookings," Mr Stanley said.

"I put in another £20,000 when we got told we could reopen at the end of 2020 ... but then came another lockdown. I’ve now cancelled about 750 events – from shop openings to weddings and product launches, costing around £50,000 each - all gone."

Despite the difficulties facing businesses, a YouGov survey found 71 per cent of the public support delaying the lifting of lockdown with 41 per cent expressing strong support. Just 14 per cent said they strongly oppose it.

It comes as new analysis shows England’s rate of new coronavirus cases has climbed to its highest level for more than three months. Some 37,729 new infections were recorded in England in the seven days to 9 June, according to Public Health England.

This is the equivalent of 67.0 cases per 100,000 people, the highest level since 2 March, when the rate stood at 69.6.

And on Monday Public Health England reported that the UK had logged 7,742 new infections in just the last 24 hours – the highest one-day tally since February.