Kate Andrews

The roadmap paints a grim picture for business

The roadmap paints a grim picture for business
(Photo by OLI SCARFF/AFP via Getty Images)
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As the Prime Minister announced the details of his government’s ‘roadmap’ out of lockdown in the Commons on Monday, no doubt some will have been cheering on the announcements, which will allow them to keep their pre-planned parties or holidays scheduled in their diaries. But the timeline has painted a grim picture for business in the months to come. According to the timetable, we are nearly two months away from outdoor dining being made legal again, and three months away from a return to indoor dining. While non-essential retail and personal care premises (including hair and nail salons) are billed to open on 12 April, social distancing measures look set to be with us for the months ahead, with no plan to review the measures until the UK is nearing Step 4 — when legal limits on social gatherings and live events are set to lift — which won’t be until 21 June.

UKHospitality chief executive Kate Nicholls described Monday's announcements as ‘devastating’ to the industry, with reopening still so far away. ‘This delay in reopening will make the job of survival all the more difficult for businesses only just clinging onto existence,’ she said. ‘It is much more than just an inconvenience for many employers in our sector, it is another delay that they cannot afford and, for too many, will not be able to survive.’

The majority of the hospitality industry does not have access to an outdoor area, which means at least an additional five weeks of closure this spring. But even for these businesses, the legal ability to reopen their doors is only half the battle. Social distancing rules are key: for many in the hospitality and leisure industry, their models are only sustainable when operating at near full capacity. Last year, several pub and hospitality trade bodies conducted a major survey and found that even under the former Tier 2 restrictions — which saw these outlets open, but with social distancing and curfews in place — over 75 per cent of the businesses they represented had concluded that they wouldn't be viable by 2021.

Monday's roadmap does little to address the trade-offs between cautious reopening and the impact on British business. While each step includes a ‘socio-economic analysis’, the content is thin and retrospective. Rather than assessing what the additional weeks or months of closure means economically for industry, it acts instead as a walk down memory lane, publishing a brief overview of the economic and social pain already experienced — something businesses and their employees are far too familiar with.

These announcements will directly impact Chancellor Rishi Sunak when he delivers his Budget next week where he will be expected to account for this elongated reopening. The furlough scheme is expected to be extended into the summer, and deadlines for accessing the different Covid loan schemes are also likely to be addressed (with the government already set to write off £31 billion worth of loans issued to date). The CBI has described next week’s Budget as the ‘second half of this announcement — extending business support in parallel to restrictions will give firms a bridge to the other side.’ But as Sunak himself has pointed out many times since the crisis began, no policy can save every business and job. With the hospitality workforce already estimated to have shrunk by a fifth last year, Monday's announcement likely means more closures and job losses.

As we get more data about the real-world impact of the UK’s remarkable vaccine rollout, pressure is likely to grow from the business community on two fronts: first, if the data continues to show very positive signs about the vaccines’ ability to reduce hospitalisation and death, questions are likely to grow about the pace and possible acceleration of the timeline. Second, Johnson’s reference to ‘Covid status certification’ is likely to become a hot topic in the coming months, when the all-but-confirmed rollout of vaccine passports for international travel is also considered for domestic use. Once Denmark announced it would pursue a policy of vaccine passports for travel, business groups almost immediately started pushing for their use at home. It’s possible British business will follow suit.