British companies face the prospect of a “bleak mid-winter” according to the boss of the UK’s biggest lobby group, after high-street retailers, pub chains and airlines warned of the impact a second lockdown in England will have on their businesses.
Carolyn Fairbairn, the director general of the Confederation of British Industry (CBI), said the latest English lockdown was in some ways worse than the first one, which started in March.
The new restrictions in England mean that non-essential shops and all pubs and restaurants will be forced to close from Thursday until at least 2 December. Domestic and international travel will also be banned, except for work, education or other legally permitted reasons.
“I’ve got to be really honest, there are ways in which this lockdown is also much worse,” said Fairbairn, speaking at the CBI’s annual conference before she steps down later this week. “Gas tanks are depleted, factories run down in so many businesses across the country, in retail, in hospitality. Our aviation sector is absolutely on its knees.
“We are heading into winter, a bleak midwinter. This is the run-up to Christmas. It is the most important time for so many firms.”
The government has extended its coronavirus job retention scheme until December, paying 80% of the wages of furloughed workers, but Fairbairn said the short extension would not give longer-term clarity for businesses looking to plan beyond the next month.
That criticism was echoed on Monday by other businesses who warned that they would be severely affected by the hastily announced restrictions.
Jonathan Neame, the chief executive of Shepherd Neame, one of Britain’s oldest breweries, criticised the government for a “fourth change of strategy affecting hospitality within the last six weeks”, in an interview with BBC Radio 4’s Today programme.
He said: “There is, I’m afraid, zero trust within hospitality about the government’s strategy at this moment in time and there’s a real sense that we’re going into lockdown for what is purported to be one month but in reality could be through to March. That would be absolutely catastrophic for the sector.”
Associated British Foods, the owner of Primark, said it would lose £375m in sales from the high-street clothing retailer because of the new English lockdown and other restrictions in key European markets. In an update on Monday it said that 57% of its shops would be closed temporarily from Thursday.
GVC Holdings, the owner of betting brands including Ladbrokes and Coral, issued a profit warning, estimating that the latest restrictions, including the closure of high-street branches in England and Europe, would cost it £37m.
The government also faced criticism over its handling of the lockdown announcement. The first leaks of the intention to impose a new lockdown were reported on Friday evening, after UK markets closed. The reports prompted a scramble from the government to flesh out the details of the lockdown, as well as confusion among businesses.
The boss of Britain’s biggest airport group, Manchester Airlines Group, hit out at the government for its “shocking” neglect of the aviation and travel industry, and accused the prime minister of “effectively shutting down his business” via Twitter.
Charlie Cornish, the chief executive of the group, whose remit includes Manchester and London Stansted airports, said airports would be forced to act quickly to secure their futures after the new travel ban.
MAG is planning to cut 900 jobs. Cornish said urgent government support was needed to prevent more job losses in an industry that had been buffeted by “chaotic changes in policy” throughout the pandemic. No dedicated package of support has been given to aviation, despite early indications from the chancellor that specific measures would be considered.
Cornish said there had been no warning or discussion with the industry about the travel ban.
He said: “Given the huge impact on the hundreds of thousands of people working in the aviation and travel industry, it is shocking that the prime minister didn’t consider the shutdown of international travel worthy of mention … [but] symbolic of the way government has neglected UK aviation and the role it plays our economy from day one of this pandemic.”
The chief executive of the exercise chain PureGym said the decision to close gyms in England was “regressive” and would damage millions of users’ health. Humphrey Cobbold said the company, which will temporarily close 236 gyms, had written to the prime minister asking him to class gyms as an essential service, or else face the prospect of “significant closures” in the sector.