'Economic negligence': Labour warns 650,000 hospitality firms fear collapse before end of lockdown

Suban Abdulla
·2 min read
London UK, September 25 2020, Empty Seating Area Outside A Restaurant, Hospitality Industry Crisis, COVID-19 Pandemic
Labour said that the government would be guilty of “economic negligence” if it fails to act. Photo: Getty

Britain’s opposition party has warned that thousands of hospitality businesses fear going bust when the UK’s latest national lockdown ends.

The Labour Party says that one in three hospitality businesses — an estimated 650,000 firms — fear they could collapse.

Labour said that the government would be guilty of “economic negligence” if it fails to act.

The prime minister has said that the government will publish a "roadmap" out of the coronavirus lockdown on 22 February.

A Labour analysis of the latest ONS survey found more than 650,000 accommodation and food services businesses have little confidence they will avoid collapse.

Its research also shows that more than 54,000 hairdressing and beauty firms have similar fears.

Overall, more than a million companies say they will run out of cash reserves in the coming three months.

“Under the current economic offer, the average hospitality or leisure business would receive £11,000 less during the third lockdown than it did during the first – despite being in a significantly worse financial position now,” the party said.

A government spokesperson said that the government has “invested more than £280bn” throughout the coronavirus pandemic to “protect millions of jobs and businesses.” Adding that it has “extended self-employed and furlough schemes” through to April so that people are certain of available help.

“For hospitality businesses that comes on top of a business rates holiday, VAT cuts and top up grants worth up to £9,000 per property to last them through to the spring,” the spokesperson said.

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The shadow business minister, Lucy Powell, called on the business secretary Kwasi Kwarteng “to stand up for businesses in government” and not “leave them to go bust.”

“It’s his job to be their strong voice, not a Treasury mouthpiece,” Powell said.

She added: “A million firms are struggling with a cash crisis threatening jobs and livelihoods just as the vaccine offers hope. The cost of business insolvencies and unemployment on this scale would take a wrecking-ball to our economy.

“If the government fails to act on this latest evidence, and doesn’t bring forward an urgent, comprehensive plan, they’ll be guilty of economic negligence that will choke off the recovery, and damage our country for years to come.”

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