Labour warns one in three hospitality businesses fear collapse before lockdown ends

‘Economic negligence … will choke off recovery’

Labour has warned that one in three hospitality businesses – an estimated 650,000 companies – fear they could collapse before the latest lockdown ends.

Last week, Boris Johnson announced that, as a first step, he would try to reopen schools in England from the second week in March, raising fears the current restrictions could last into May.  

The government is due to set out a roadmap on how to lift the lockdown in the third week of February, when it says it will have more data on the success of the coronavirus vaccine programme.

A Labour analysis of the latest ONS survey found more than 650,000 accommodation and food services businesses have little confidence they will avoid collapse.  

The same is true for more than 54,000 hairdressing and beauty companies. Overall, more than a million say they will run out of cash reserves in the next three months.

Labour said the government would be guilty of “economic negligence” if it fails to act.  

The shadow business minister, Lucy Powell, said: “A million firms are struggling with a cash crisis threatening jobs and livelihoods just as the vaccine offers hope. The cost of business insolvencies and unemployment on this scale would take a wrecking-ball to our economy.

“If the government fails to act on this latest evidence, and doesn’t bring forward an urgent, comprehensive plan, they’ll be guilty of economic negligence that will choke off the recovery, and damage our country for years to come.”

A government spokesperson said: ‘‘We’ve invested more than £280bn throughout the pandemic to protect millions of jobs and businesses - and extended our self-employed and furlough schemes through to April so that people have certainty that help is in place. For hospitality businesses that comes on top of a business rates holiday, VAT cuts and top up grants worth up to £9,000 per property to last them through to the spring.”