Let me be blunt. Sunak’s package does not help the hospitality sector, certainly not its small businesses. Perhaps he never intended to. Perhaps he has taken the view that the Eat Out to Help Out scheme, VAT cut (of no use to those on the fixed rate scheme) and other help was enough. Or that there is not enough money left. Or that it does not matter – being unskilled, low value and unnecessary in a post-Covid world. If this last reason, he is making a mistake: hospitality is more than city centre sandwich shops. Running a small restaurant and pub well and profitably, day in, day out, one which has happy, repeat customers takes great skill. If you don’t believe me, think of how many pubs and restaurants you’ve visited to which you wouldn’t want to return. Hospitality is a key part of the tourism and leisure sector, one of Britain’s biggest industries, one which is key to many parts of Britain, especially in those areas this government claims to want to level up. It is certainly essential to the Lake District.
Enough of the special pleading. Why doesn’t it work for this sector? His scheme only works for businesses which can mitigate a reduced level of demand by cutting hours worked by staff. But this fundamentally ignores the problems these businesses face. They have been open since July (having lost 4 of the most lucrative months of the season) and have had to be open for as many hours as they can manage in order to earn and to meet the demand that is there, the demand that is permitted by the government. Cutting hours, reducing work for staff is not an option. If anything, such businesses will need to open earlier to try and make up for the revenue lost through closure at 10. That reduced demand is not – yet – caused by people not wanting to go out and socialise. It’s been caused by government restrictions on what people can do, what such venues can offer and when. And these restrictions are on the most profitable parts of their business: parties, drinking at the bar, the hours after 10 pm, catering for groups of all kind, weddings, funerals and other celebrations, Xmas and NY parties etc.
The second problem they face are the increased requirements imposed by government. Table service for drinkers, monitoring customers to ensure that they use the tracing App correctly, that they don’t break the Rule of Six, the enhanced hygiene requirements, all require at least the same number of staff, if not more, not least because venues will be held legally responsible for failures to comply, with fines that few can easily afford. Reduced revenue and increased costs are not a happy combination.
The final issue is the length of time these restrictions will be in place: 6, maybe 9 months (as Hancock has hinted at), maybe even longer. That means that the next spring/summer season for hospitality will be adversely impacted. As Tim Farron put it: hospitality businesses are facing 3 winters in a row and have no assurance that they will be in a position to trade normally even by next spring. It will be very hard to survive this.
Since last week, restricting demand for and increasing costs in the hospitality sector has been this government’s deliberate policy in order to reduce the virus’s spread. One might query why the focus has been on a sector which, according to ONS statistics, has been responsible for only 5% of the recent increase in the virus. One might also query whether allowing people to mix and drink at home will more sensible. Or whether last week’s restrictions will be enough. But hard choices need to be made. This is not in dispute.
What is not fair, though, is what the government has now done: placing the burden of limiting the spread of the virus largely on one sector for a prolonged period of time then leaving it without adequate support. Targeting pubs and restaurants in this way has dented consumer confidence making it even harder for them to get customers in. It risks killing them slowly.
To govern is to choose, as someone once said. The government has made its choice for now. But if these measures don’t work, if there has to be another lockdown, if the virus reappears again when restrictions are lifted, if there is still no effective vaccine, what then? And what sort of economy and businesses will we have left when the dust clears?
Meanwhile if you have a favourite local venue, want to see it survive and can visit, please do. Use it or lose it. Thank you.