Labour warns of ‘perfect summer storm’ brewing for businesses and calls for Monday’s roadmap announcement to include details of economic support
If there are any changes to the 21 June ‘unlocking’ date as a result of this government’s failure, announced this Monday – it must be paired with details of economic measures to support affected businesses and industries, Labour has made clear today.
While Labour believes the roadmap should be guided by the science, throughout the crisis government incompetence has meant they have been too slow to act, and too often details of economic support have regularly trailed behind public health announcements, severely damaging business confidence, causing anxiety, and even leading to workers being let go unnecessarily.
Labour is warning of a ‘perfect summer storm’ brewing for high street businesses still affected by restrictions if the 21 June is delayed but this change is not matched by economic measures, with several pinch points for businesses coming down the track:
- On 23 June, quarterly rent is due.
- On 30 June, the ban on commercial rent evictions ends.
- On 1 July, employers must start contributing 10% to furlough costs.
- On 1 July, 100% business rates relief tapers off to 67% business rates relief.
The hospitality industry is likely to be one of the worst affected industries if the unlocking date slips, with a quarter of the industry still closed. That includes those legally required to shut like night clubs and live music venues, as well as those for whom it is not currently financially viable to open because of restrictions impacting trade, including wedding venues, events spaces and very small pubs and bars.
From 1 July, businesses will no longer be legally protected from evictions by their landlords. It is estimated that around £6 billion of debt accrued during the crisis is owed to commercial landlords – with 90% of this total in the retail and hospitality sectors.
It is estimated that two-thirds of retailers in the UK are at risk of legal action on at least one of their stores, and around 40 per cent of hospitality businesses have not reached an agreement on rent arrears.
In the hospitality sector, 12,000 premises have already been lost during the crisis including 1 in 10 hotels and restaurants and 1 in 5 casual dining businesses.
Ed Miliband, Labour’s Shadow Business Secretary, said:
“Businesses have operated under historic uncertainty during this crisis, worsened by details of economic support playing catch up with public health announcements.
“Now once again, businesses are in the dark, with a perfect storm of financial pinch points brewing and no reassurance from government that economic measures will remain in step with possible changes to the roadmap.
“It is right we remain guided by the science to tackle this virus, but businesses should absolutely not be paying the price for the Government’s poor handling of our borders and the new variant.
“We’ve got to back businesses on our high streets and safeguard the recovery of local economies. Businesses should not have to worry for even one day that economic support will be pulled away whilst restrictions remain in place.”