Government tells pubs, clubs, restaurants, casinos etc to close and announces further financial support

At the daily coronavirus press conference this evening (20 March 2019), the UK Prime Minister, Boris Johnson, and Chancellor of the Exchequer, Rishi Sunak, announced the following:

  1. The government is now telling pubs, bars, cafes and restaurants (subsequently extended during his speech to clubs, theatres, cinemas, gyms and leisure centres) “to close tonight as soon as they reasonably can and not re-open tomorrow”, although they will be able to continue to provide “takeaways” (in relation which, see our website posting here). Answering a question from the press, the Prime Minister indicated that he thought that “there are licensing arrangements that will make this simple” but suggested that closure will not need to be enforced because “in reality everybody can see the imperative of what is necessary”.
    • The BBC has subsequently reported that it has a full list of the premises that are to close:
      • Food and drink venues
      • Pubs, bars and clubs
      • Cinemas, theatres, concert and bingo halls
      • Spas, indoor leisure and gyms
      • Casinos and betting shops
      • Museums and galleries
    • Absent any disorder or nuisance grounds justifying a closure notice, it remains to be seen how in practice enforced closures might be effected by way of any licensing arrangements, other than by way of a licence review application on public safety grounds, although a power to close premises (or impose restrictions on persons entering or remaining inside them) will exist once the Coronavirus Bill – which at this stage has merely had its first reading in the House of Commons – is enacted into law. However, UKHospitality has already recommended closure to its members and it may be that the Prime Minister is correct in thinking that operators of the types of businesses in question will comply.
    • [Note: New emergency regulations providing coronavirus closure powers –The Health Protection (Coronavirus, Business Closure) (England) Regulations 2020 – came into effect at 2pm on Saturday 21 March 2020, providing immediate powers to close hospitality, leisure and gambling premises in England and Wales, as reported by us here]
  2. The Prime Minister considers the above step is required because of the need to “physically keep people apart” and to achieve a “faster economic and medical recovery”. There will be a review “in the next months” (which we have interpreted to mean on a monthly basis) to see if these measures can be relaxed.
  3. In what the Chancellor described as an “unprecedented economic intervention”:
    • The government will “step in and help to pay wages”.
    • Under the coronavirus job retention scheme, all employers will be eligible for a grant to cover up to 80% of the wages of employees being kept on the employer’s payroll (up to a maximum of £2,500 per employee per month and backdated to 1 March 2020), on the basis that employers can top up the wages if they wish to. This scheme is designed so that employees can retain their jobs and will run for a period of three months, which can be extended for a longer period if necessary. The government is not placing any limit on funding for this scheme. HMRC are “working day and night” with the aim of making such grants available by the end of April 2020.
    • It was announced on 17 March 2020 that loans under the new Business Interruption Loan Scheme (introduced in last week’s Budget) will increase from the previously promised £1.2million to £5million in value, with no interest for the first six months. The Chancellor has today confirmed that such loans will be interest-free for 12 months and will become available from Monday of next week (23 March). Further measures will be announced next week to ensure that larger and medium-sized businesses can access the credit they need.
    • Cashflow support will be provided via the VAT system with the next quarter’s VAT payment liability deferred until the end of June 2020 (and, he added, businesses “will have until the end of the financial year to repay those bills”).

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Commenting on the Chancellor’s announcement of further financial support, UKHospitality Chief Executive Kate Nicholls has said:

This generous package will support our fantastic staff, is very welcome and additionally gives hope to those who have been laid off. This may have saved up to 1 million jobs, but we need it as soon as possible to ensure we can continue to trade.

While VAT deferrals preserve some cash, we still face rent payments next week before the support is due to arrive. Banks and landlords need to do more to help us bridge the gap towards this generous Government support.

Damage is being done now, so we need help now.

She added the following comments on Twitter:

It is vital now that all rents for hospitality businesses – due on Wednesday next week – are cancelled or deferred. Mass business failure likely without it as businesses have no cash.

Michael Dugher, Chief Executive of the Betting & Gaming Council has tweeted:

On behalf of the BGC, I want to make it clear that our industry will co-operate completely with the Government’s latest advice. More importantly, we are determined to play our full part in this historic national effort to beat the virus, protect businesses and safeguard jobs.

Our industry employs around 70,000 people and we strongly welcome the unprecedented package of support announced by Rishi Sunak this evening.

For this week’s coronavirus-related postings on our website, see:

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