Industry leaders have warned of a bleak winter as companies across England brace for a “truly devastating” nationwide lockdown starting this week.
Economists yesterday downgraded their forecasts for the UK and executives steeled themselves for a “bumpy ride” after pubs, shops, hairdressers, cinemas and theme parks were ordered to pull down the shutters again.
Downing Street was reprimanded by one of Britain’s leading lobby groups for leaving businesses to figure out for themselves whether they can remain open by deciphering “speculation and leaks and surmise”.
Dame Carolyn Fairbairn, the CBI’s outgoing director-general, described Thursday’s lockdown as “incredibly bad news” and she called on No 10 to urgently improve its communications. “This has to get a lot better,” she told the organisation’s annual conference.
As Boris Johnson sought to persuade Conservative backbenchers to support the proposed tighter restrictions, companies lined up to outline the stark financial impact of the prime minister’s plans:
•Primark faces a £375 million hit to sales as high streets and shopping centres prepare to close until at least December 2. Associated British Foods, its owner, said that 57 per cent of the discount fashion chain’s retail estate would be shut;
•Pure Gym, the country’s largest gym operator, urged ministers to reverse their “regressive decision” to shut down the sector. Humphrey Cobbold, chief executive, said that its service was critical for maintaining physical and mental wellbeing and that its closure would hit those least well off the hardest;
•GVC Holdings, the gambling operator behind Ladbrokes and Coral, said that the closure of its shops in England, Wales, the Republic of Ireland, Italy and Belgium would cost it £43 million for a full month, of which £34 million would be from its UK operations;
• Goldman Sachs and Deutsche Bank, two of the City’s biggest employers, sent many of their UK staff home. Others are expected to follow suit. Tiina Lee, Deutsche Bank’s UK chief executive, said that only those who “cannot carry out their role from home” would be in its office;
•Hiscox, the London-listed, Bermuda-based insurer, said that previous estimates for Covid-related claims were unchanged at $387 million net of reinsurance, including a first-half sum of $150 million for event cancellations and $130 million from business interruption.
Alan Jope, the chief executive of Unilever, told the CBI ‘s annual conference that many had been “seduced” by the resilience of stock markets and a handful of large companies. “I think a year from now we’ll look back and it will be more difficult than most commentators are reflecting,” he said. “The impact on SMEs and jobs has not yet worked its way into the economy. So I think we’re in for a bumpy ride.”
Oxford Economics projected yesterday that UK GDP would fall by 10 per cent month-on-month in November as a result of the restrictions. The National Institute of Economic and Social Research forecast a drop of between 11 per cent and 12 per cent.
Gavin Patterson, UK boss of Salesforce and a former BT chief executive, said: “We will begin to see the economy gradually improve, but it’s not going to be a smooth recovery. It’ll feel at times as though we’re making two steps forward, one step back.”
Alok Sharma, the business secretary, apologised to disrupted companies, but insisted that the government stood “shoulder-to-shoulder” with them.
A second lockdown had always been “under review”, he claimed, despite Mr Johnson’s argument last month that such a measure would “make no sense at all”.
“We’ve been there for you since the start,” he told companies in a speech. “We’re here for you now. And we’ll be there for you for as long as you need us.”
Sue Garfitt, chief executive of Alpro, called on the government to work “much more closely” with businesses as the pandemic continued. “I think that would help to close the loop on some of the uncertainty that business leaders have and have had over the past 12 months,” she said.
