Hospitality faces being ‘wiped out’ by new tiers

Greene King

The hospitality industry has claimed the government’s new Covid-19 tier system will wipe out billions of pounds of trading and lead to huge job losses, despite many venues being allowed to reopen.

The system for England announced yesterday will place 98 per cent of the country’s hospitality sector under the toughest Tier 2 and Tier 3 restrictions, according to UK Hospitality, the lobby group. An estimated £7.8 billion of sales are expected to be lost in December compared with last year.

Nick Mackenzie, 52, chief executive of the Greene King pub group, said: “This puts hundreds of thousands of jobs at risk and places the future of British pubs in even greater doubt for the years ahead. Out of more than 2,300 pubs in England, we will have just six in Tier 1 areas, with pubs in Tier 3 closed and pubs in Tier 2 unlikely to be profitable.”

Hospitality venues subject to Tier 3 restrictions, such as bars, pubs, restaurants, indoor entertainment and tourist venues, must remain closed. In Tier 2, pubs and bars must close unless operating as restaurants. Customers must be from the same household or support bubble and venues will have to close by 11pm. The Tier 2 restrictions are estimated to impact more than 120,000 venues which employ nearly 1.5 million people.

“Under this severe a restriction, 94 per cent of our members say they will be unviable or trading at a loss,” Kate Nicholls, chief executive of UK Hospitality, said. “We still have not seen any evidence that hospitality venues, which have invested great time effort and money to making their spaces Covid-secure, are a problem area in terms of infection, so it seems unfair and arbitrary that hospitality is being dealt such a harsh hand.”

Jabbar Khan, 45, founder of the Lasan Group of Indian restaurants in Birmingham, which will be in Tier 3, said: “By cancelling Christmas for the hospitality sector, the government has effectively wiped out three months of trade which will result in many businesses closing, jobs being lost, and city centres left empty. The sector will never recover from these measures.”

The tier system will also be a “huge concern” to retailers and their landlords who are “at the precipice”, Andrew Todd, partner at Eversheds Sutherland, the law firm, warned.

He said he expected to see a flurry of retailer insolvencies in the new year.