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UK businesses are calling on the government to extend emergency Covid-19 support as Boris Johnson prepares to delay the end of lockdown restrictions by up to a month.
The PM is expected to announce a four-week delay to the final easing of lockdown restrictions in England, from 21 June, due to the rapid rise in cases of the Delta variant first detected in India.
Kate Nicholls, UKHospitality chief executive, said this morning that a one-month delay would be devastating for the sector, which has been hit particularly hard by the pandemic.
She told the BBC this morning that ministers must offer more support, including extending a moratorium on evictions and debt collection from commercial tenants that is due to lift on June 30.
If legal restrictions on social contact are not ended, then sports, pubs and cinemas will still face capacity limits, and nightclubs would stay closed.
A report earlier this month showed that nearly a quarter of licensed premises in Britain remain closed, because the current restrictions and space constraints make operating simply unviable.
Many of those businesses are “running out of road” after 16 months without revenues, Nicholls warned. And for the rest, 21st June was the day when they could start to trade profitably again, she explains.
A four-week delay would cost the hospitality sector around £3bn in lost sales, Nicholls said. So it’s crucial that the government provides help in several key areas.
One is Rent arrears. Hospitality firms currently owe £2.5bn in unpaid rent, built up since the first Covid-19 lockdowns. Nicholls says it’s vital that the moratorium on demands for commercial rent arrears, due to expire on 1 July, is extended.
Those protections prevent landlords from evicting commercial tenants or using statutory demands or winding-up petitions to recover rent arrears.
Nicholls says hospitality firms also need more breathing space on business rates, as a £100m bill is due to hit the sector in July when the current temporary exemption expires.
Such help will assist hospitality firms to keep operating, bring more people back to work, and repair their “shattered balance sheets” after sixteen months of below-profitability trading, she adds.
The government is also facing calls to delay the winding down of the furlough scheme, which currently pays 80% of wages to sidelined staff.
From July 1st, the Government’s share will fall to 70% with employers contributing 10%, as part of a withdrawal timetable that will see furloughing finish at the end of September.
But if some hospitality firms cannot open, and other companies are still operating under Covid-19 limits, then they will struggle to meet that new cost.
Claire Walker, co-executive director of the British Chambers of Commerce, said (via The Times):
“We would be calling for the government to provide further cash grants, at least equivalent to levels provided during the first lockdown, and to delay the tapering of government payments into the furlough scheme, planned for the start of July.”
The decision on extending restrictions beyond 21 June will come this evening. But a delay looks inevitable, with ministers have been told that a four-week delay to easing all Covid restrictions would probably prevent thousands of hospitalisations.
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