Spirit of the nation
How villages are keeping the local afloat during the emergency
THE Government’s order to close all cafés, pubs, bars, restaurants, nightclubs, gyms, theatres and leisure centres will inflict severe long-term damage on the sector, economists have warned.
The announcement followed concerns that swathes of the population were ignoring advice to avoid public places to contain the spread of the coronavirus.
Prime Minister Boris Johnson said: “I do accept that what we’re doing is extraordinary: we’re taking away the ancient, inalienable right of freeborn people of the United Kingdom to go to the pub, and I can understand how people feel about that. It’s a huge wrench.
“It’s heartbreaking to think of the businesses that will face difficulties as a result of the measures this country has had to take.”
The number of people eating out was already down 91pc on a year earlier by Wednesday this week, while cinema ticket sales were just £5.6m last weekend, down 56pc on last year, according to data analysed by Capital Economics. It has forecast a 15pc fall in GDP in the second quarter.
Paul Dales, its chief UK economist, said yesterday’s directive would have a huge impact.
“Activity in those sectors won’t exactly go to zero, but will fall incredibly far,” he said. “Takeaways could do OK and some restaurants will be able to do takeaways instead of sit-down meals, but you’re talking about monumental declines in economic activity for at least one month, if not three. It’s possible this will linger long in the mind when all this is done. People might want to play it safe, although many will be dying to go to the pub.”
Philip Rush, chief economist of consultancy Heteronomics, said the move was a hammer blow to the hospitality industry. “Lots of businesses had been struggling anyway. As much as the Government is providing support, there will be a time lag while they wait for it.
“You’ve seen the rise of services like Deliveroo as people choose to have restaurant-quality food delivered to their door. Quite abruptly that’s being made the only option for people. Some businesses will want to add that option now in the name of business continuity management.”
George Buckley, chief UK economist at Nomura, said the Government had no choice but the impose the ban. “People weren’t listening, they had to be told,” he said. “Many wanted some direction.
“The smaller the impact on the sector in the longer term, the bigger impact there will be on the public finances. These are unprecedented times.
“The supermarkets might start running low on booze and people will buy more food to consume at home. The longer it lasts, the longer people will change their behaviour.
“Our view is this is going to be more like a tick-shaped recovery than a Vshaped recovery – it’ll go down at the start and take a long time to get people back out. For plays and shows, people need to book way in advance.”
Trade association Ukhospitality urged the Government to roll out support measures announced yesterday “as soon as possible”. Chief executive Kate Nicholls said the package was very welcome but added: “This may have saved up to one million jobs, but we need it as soon as possible to ensure we can continue to trade.”