Tuesday 1 December 2020 8:55 pm

Business bodies warn that three-quarters of pubs, bars and casinos could go bust under new tier system

The UK’s leading business bodies have slammed MPs’ decision to vote the new tier system in place from midnight tonight as the “nail in the coffin” for many businesses, warning that it will cause three-quarters of night-time venues to shut forever. 

The Prime Minister this evening fought off the largest Tory backbench rebellion in his premiership after MPs agreed to implement new tiered Covid restrictions from tomorrow. 

The vote means London will enter Tier 2 from midnight tonight, as the capital joins 99 per cent of England’s population in the top two levels of coronavirus restrictions, 

Under the fresh lockdown measures, London’s pubs and restaurants will only be allowed to serve patrons if they order a “substantial meal” while household mixing will not be allowed indoors. 

Casinos, cinemas and theatres must adhere to the new 11pm curfew, while clubs will not be allowed to reopen under any tiers. 

The Night Time Industries Association (NTIA), which represents more than 1,200 bars, clubs, casinos and music venues across the country, said the new tier system demolished chances of a Christmas recovery for the night time sector, which “has suffered horrendously since the start of the pandemic”.

“Today’s parliamentary vote on the new Covid restrictions will be the final nail in the coffin for thousands of businesses in Tier Two or Three areas,” said NTIA chief Michael Kill.

“Without the required financial support, 75.6 per cent of night-time economy businesses now face the reality of permanent closure. Many of these are the smaller businesses that are part of the very fabric of town and city centres and of our social lives.”

The night time economy is the UK’s fifth-biggest industry, accounting for at least eight per cent of the UK’s employment and annual revenues of £66bn, according to data from the NTIA.

And London’s night time economy directly supports 723,000 jobs — one in eight in the capital, according to the Office for National Statistics

In a survey of more than 400 entertainment and hospitality businesses last week, the NTIA found that almost three-quarters of businesses have made employees redundant since the start of the pandemic, with more than 60 per cent having let go of at least half of their staff. 

“These new restrictions, overtly targeting the hospitality sector, have no real grounding in scientific fact and leave little or no confidence in the Government making science-based policy decisions,” said Kill. 

“It is now abundantly clear that the night-time economy is being sacrificed so that other sectors may trade through the festive period. If the government will prevent our sector from operating sustainably then it must also proportionately compensate the sector for lost revenue, pre and post the festive period.”

Prime Minister Boris Johnson today announced a £1,000 grant for wet-led pubs forced to shutter under the new tier system, which will last until at least 2 February.

Announcing the measures in the Commons, Johnson said: “Our pubs, hotels and restaurants are at the heart of our community and a part of our identity as a country. The hospitality industry has borne a disproportionate share of the burden in this crisis.”

But business leaders were quick to slam the PM for handing cash to some sectors while leaving others to support themselves.

“The £1,000 contribution for wet lead pubs as a top up grant is an insult, What about nightclubs? One business type that has escaped the narrative of financial support since March,” said Kill. 

Meanwhile the British Beer & Pub Association (BBPA), the leading trade association representing brewers and pubs, criticised the support package as “not nearly enough”, and urged ministers to draw up further cash for businesses forced to hibernate over the winter.

“£1,000 on its own is a meagre amount for pubs to cover nine weeks of costs let alone compensate them for the huge loss of business over the festive period,” said BBPA chief executive Emma McClarkin.

“It is quite frankly an insult to thousands of pubs across the UK that are on their knees. It barely touches the sides of what pubs up and down the country require to cover their costs and ensure they survive,” she added.

“Nor does it recognise the inherent danger they are in heading into the next year without more support should the tighter tier system remain unchanged.”

Recent research by the BBPA showed that the average pub will lose £47,000 in revenue under the new tier system, while the government will spend an estimated extra £6.2bn each month to prop up furloughed employees.

“A £1,000 payment is not even a sticking plaster,” said McClarkin. “Our sector needs more long-term support to ensure its survival, else more than 30,000 pubs – 80 per cent of those in England — are at risk of closing for good if this is all the government is going to offer.”