Freedom Day delay: ‘catastrophic’ for businesses on life support

Billions to be wiped from economy and Sunak rejects calls to extend furlough scheme

Nightclub picture
Liverpool held a test event in April, but nightclubs remain closed
(Image credit: Anthony Devlin/Getty Images )

Forecasters have warned that the UK’s Covid-hit economy will suffer losses of £55m a day if Boris Johnson confirms that “Freedom Day” is to be delayed by four weeks.

Government sources have told the BBC that “most coronavirus rules will remain in place” in England for another four weeks after the planned 21 June unlocking, amid rising cases of the Delta variant.

A delay to Freedom Day will see “billions” wiped off the economy, The Daily Telegraph reports. The “beleaguered” hospitality sector will “suffer the lion’s share” of the £1.6bn hit if capacity limits on pubs, restaurants, theatres and cinemas remain in place.

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“The government needs to acknowledge that most of the economic pain will once again be borne by those businesses that have been among the hardest hit by the pandemic so far – pubs, restaurants, nightclubs and many other businesses in the hospitality and cultural sectors are desperate to reopen,” said Kay Neufield, head of forecasting at the Centre for Economics and Business Research (CEBR). “The longer restrictions are required, the higher the risk of an insolvency wave later in the year.”

‘A kick in the teeth’

Prof Robert Dingwall, who is an adviser to the government, believes a delay would be “extremely damaging to business confidence, the economy, morale – especially since there isn’t really a clear justification for it”. Speaking to the Telegraph, he added: “What we are seeing is the beginning of what endemic Covid looks like and we should be unlocking and living with that. I have been saying for ten days now the only thing that would persuade me [not to lift restrictions] is a significant increase in intensive care admissions, and that is not happening.”

Douglas McWilliams, of the CEBR, said the planned delay was “a kick in the teeth” for sectors such as hospitality. While Mark Harper, chairman of the Covid Recovery Group of Tory MPs, said it would be “devastating for business confidence, people’s livelihoods and wellbeing”, the Daily Mail reports.

“Delaying 21 June will send a clear message to employers and workers that when Covid cases increase this (and every) autumn and winter, they cannot rely on the government to keep our society open,” Harper tweeted. “It would be catastrophic for many businesses currently on life support.”

End of the party for nightclubs?

The start of Euro 2020 has brought some cheer to struggling pubs, who had “hoped for a lift” from the delayed football tournament, the Telegraph said. However, the sector could lose as much as a quarter of its estimated £104m takings if the “rule of six” remains for indoor gatherings.

Pubs will likely be restricted to table service while theatres and cinemas will continue at 50% capacity. Meanwhile, it could be the “end of the party” for many nightclubs with a quarter set to close due to the roadmap delay, City A.M. reports.

Couples to be ‘thrown a lifeline’

It was reported by the Daily Mirror last week that delaying the reopening date could see 50,000 weddings at risk of cancellation in the month from 21 June.

Couples desperate to marry have pleaded “let us have our day”, and they could be thrown a lifeline by the PM in his address, The Sun adds. Ministers were “thrashing out plans” to let more than 30 guests attend weddings so long as they stick to social distancing. One minister told the paper: “There is hope a deal can be done.”

Chancellor of the Exchequer Rishi Sunak

Chancellor of the Exchequer Rishi Sunak
(Image credit: Getty Images)

Furlough won’t be extended

Despite the expected delay to ending lockdown, Rishi Sunak has rejected calls for the furlough scheme to be further extended.

In the spring budget the chancellor announced that workers would continue to be guaranteed 80% of their salary until September. But companies will be asked to contribute 10% in July and 20% in August and September.

Business groups have urged the chancellor to delay the wind-down if lockdown is extended, the Mail says. However, sources close to Sunak insisted the timetable for gradually withdrawing furlough would “remain the same”.

200,000 jobs at risk in hospitality

Hospitality industry leaders have told The Independent that an extra month of curbs will cost the sector £3bn in lost revenue and put 200,000 jobs at risk. Hundreds of nightlife businesses could close, with a moratorium on commercial evictions set to expire on 30 June.

Trade body UKHospitality has called for the full relief to be kept in place for a further three months until the start of October.

“We recognise that the chancellor has provided long-term support for the sector which extends into the recovery period, but there is no doubt that any extension to the restrictions will be challenging for sectors yet to open and those still trading at a loss to navigate,” said Kate Nicholls, CEO of UKHospitality. “Among other measures, the government must postpone business rates payments until at least October and extend the rent moratorium while a long-term solution is found.”

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Mike Starling is the digital features editor at The Week, where he writes content and edits the Arts & Life and Sport website sections and the Food & Drink and Travel newsletters. He started his career in 2001 in Gloucestershire as a sports reporter and sub-editor and has held various roles as a writer and editor at news, travel and B2B publications. He has spoken at a number of sports business conferences and also worked as a consultant creating sports travel content for tourism boards. International experience includes spells living and working in Dubai, UAE; Brisbane, Australia; and Beirut, Lebanon.