Tier changes close 50,000 businesses as firms and unions call for more support

Around 50,000 extra businesses will be forced to close under new Tier 4 restrictions, leaving 220,000 non-essential retailers, hairdressers and gyms across the country shuttered from Boxing Day, new data shows.

The latest numbers, from real estate advisor Altus Group, come as businesses and union leaders reacted with dismay to the latest restrictions.

Industry leaders called on the Government to increase support for businesses to avoid a widespread collapse in firms and jobs.

TUC Congress 2020
Frances O’Grady (Stefan Rousseau/PA)

Retail and hospitality representatives also urged Ministers to extend a business rates holiday for their sectors beyond April next year and to speed up the roll out of the Covid-19 vaccine.

TUC general secretary Frances O’Grady said: “These restrictions are necessary. But they are another hammer blow for struggling parts of the economy like hospitality and retail.

“Without more support from the Government, jobs will be lost and businesses will close.

“Ministers must act quickly and provide the financial help hard-hit industries badly need. They can’t watch from the side lines as companies go the wall and redundancies mount.

“And they must help families too, by boosting sick pay to a real Living Wage so that people can afford to self-isolate and increasing universal credit.”

Emma McClarkin, chief executive of the British Beer & Pub Association, said: “It is clear that it is going to be the longest winter in living memory for Britain’s pubs and brewers.

“Unless there is a greater package of financial support from the Government to secure our pubs and the brewers that supply them, a wave of business failures in the new year is inevitable.

“We desperately need the Prime Minister to step up to the plate and commit to an enhanced package of measure for pubs and brewers.

“If the Government acts now they can still secure pubs and jobs by giving locals in England the sort of support those in Wales and Scotland are getting. Without this the outlook is very bleak indeed.”

UKHospitality chief executive Kate Nicholls said: “These urgent restrictive actions require equally urgent accompanying financial supports for businesses, many more of which have been flung closer to commercial failure.

“Many more pubs, restaurants, bars, cafes and hotels, having invested so much to make their venues safe, are now looking at indefinite and total loss of trading.

“They need an immediate message that, at the very least, the 5% VAT rate and business rates holiday will remain throughout next year, supported by an urgent package of survival grants, so that they can try to plan strategies to save their businesses.

“While the Government looks now to address the immediate problem, it must recognise that hospitality was largely shut when transmissions were rising, so were not the hotbeds of infection it has often been accused to have been.

“The incessant hammering of hospitality businesses must be followed up with an equally exaggerated raft of supports to rescue the sector when the virus is under better control, or many jobs and livelihoods will have been sacrificed for little effect.”

The British Retail Consortium (BRC) has said the Government must announce plans to extend the business rates holiday for retailers and the hospitality sector beyond April next year, following the latest increase in tier restrictions.

Helen Dickinson, chief executive of the trade body, added more testing is needed and the Covid-19 vaccine rollout should be stepped up to help the economy.

She said: “The light at the end of the tunnel seems further than ever and many retailers – who are losing billions in sales with each passing week – will struggle under the new wave of closures.

“The biggest Christmas gift the Government could give us all is to put even more momentum behind the vaccination programme and more widespread testing.

“The Government is keen to keep people at home as this process is rolled out and the faster the population is vaccinated, the better the outlook for businesses across the country.”

She added: “The time for debating future business rates relief is over, it is now an imperative.

“The Government must announce targeted relief beyond April for those retailers who are suffering under the impact of repeated closures, or else be prepared for further shop closures and job losses in the New Year.”

Josh Hardie, CBI deputy director-general, said: “The rapid rise in infections is alarming so it’s only right the Government is taking measures to bring the number of cases down to protect public health.

“However, with more areas moving into higher tiers even more businesses face insurmountable pressure after such a tough year.

“While some retailers and entertainment venues have already taken precautionary measures by deciding to close, many others will lose out from one of the busiest periods of the year which brings in billions of pounds.

“Tighter Covid restrictions have already been a huge setback for firms and this will be felt even more by those who have now spent much of the year under them. The extension of Government-backed business loans and the furlough scheme will provide some certainty and respite for those under new tiers.

“But the Government should revisit support in January to ensure businesses across the UK make it through beyond Spring. Efforts to speed up mass rapid testing and vaccine rollout will help reopen the economy safely, but it is clear challenges will continue well into next year.”

Roger Barker, director of policy at the Institute of Directors, added: “The short term outlook for many businesses is bleak.

“The Government should look to reinforce its support, boosting grants for the worst hit and those who have missed out so far. It would be a huge shame to see viable companies go under with a vaccine just round the corner.”

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