Watch the webinar
Today's webinar took the form of a conversation between the CBI’s Chief UK Policy Director, Matthew Fell; the CEO of UKHospitality, Kate Nicholls; and the CEO of the Health and Safety Executive (HSE), Sarah Albon. Here are the main subjects they discussed:
- The latest developments…
- …including Test and Trace
- The scale of this weekend’s reopening…
- …and the challenges ahead
- Local lockdowns.
The latest developments…
Matthew began the webinar by observing that there have been “quite a lot of developments over the past 24 hours” – including the start of a new phase of the Job Retention Scheme (JRS). “Today is the first day of flexible furlough,” meaning that there is no minimum amount of time for an employee to be on temporary leave. This gives businesses a lot more control over hours and shift patterns, which is essential as they emerge from lockdown.
There was also, of course, a speech from the Prime Minister on the next stages of the recovery. “[It made] a good start in some areas,” said Matthew. “In terms of infrastructure, for example, around planning and levelling-up… a lot of the messages from the CBI’s ‘Build Back Better’ [campaign] were in there.”
But he continued: “I think we were looking for a little bit more on jobs and the labour market.” In general, the CBI would “like to see more on job protection, as well as job retention,” which could involve measures such as a refined version of the Apprenticeship Levy that does more to support wages. But there was nothing along those lines in the Prime Minister’s speech – it left “a few people” feeling “a bit underwhelmed,” said Matthew.
However, there are more statements to come from the government – including a fiscal statement from the Chancellor next Wednesday, 8 July. The CBI is “pushing hard” for job-protection policies to be included in that.
…including Test and Trace
The webinar focused on one forthcoming development in particular, though: the reopening of various businesses, including pubs and restaurants, this weekend. This is being enabled, in part, by a new requirement for certain businesses to keep data on their customers for the purposes of Test and Trace.
Matthew explained what this means. For starters, it only applies to “companies that have significant dwell time of customers” – such as restaurants where people may sit near to each other for extended periods. It then requires three main things from those companies:
- To identify the “lead customer” and take their contact details
- To note down the time spent by any group on the premises and, ideally, where they were sitting
- To hold that data for 21 days.
Beyond those three requirements, business shouldn’t worry about the broader demands and details of contact tracing. Kate explained that the government’s dedicated contact tracers will do all that work – and get in touch with any businesses and people who may have been affected.
But, Kate continued, the Test and Trace requirements are still a burden for businesses – especially smaller businesses in the hospitality sector. “For a lot of small, independent businesses,” she said, “there’s not very much time for them to prepare and to understand what they need to do…. The idea of taking a name and telephone number is relatively straightforward. The GDPR implications are very complicated.”
On GDPR, Matthew highlighted one part of the new rules that is absolutely unequivocal: “Businesses cannot use [this data] for marketing or sell it on.”
And Sarah made some more general recommendations: “Discuss this thoroughly with your staff and with the teams that are going to do it…. Employers can do all of the right things, but if employees don’t know how to operate in [this new] context, then it won’t work as well as it could.”
As Kate pointed out, we are expecting further government guidance on Test and Trace in the next day or two – so some businesses’ questions should be answered soon.
The scale of this weekend’s reopening…
This is a big weekend for the hospitality sector, but it might not be as big as some people expect. Kate revealed that 71% of UKHospitality’s member businesses are “adopting a phased approach,” by which they’re “not opening up their national estate in one go – they’re doing it gradually over time”.
Her estimate is that around 50% of hospitality businesses will open, to some degree, this weekend. But even those that do will be operating at “70% of normal capacity,” thanks to the need for social distancing.
As for demand, a separate survey suggests that “20% of consumers are looking to visit a pub, restaurant or bar this weekend” – or about 9 million people. “Although it sounds a lot,” said Kate, “it’s far down on where we would normally be on a sunny Saturday at the start of July.”
Besides, these effects are felt more fully in some places than in others. “There’s a challenge for London businesses and city centre businesses. With restrictions on travel, on foreign arrivals, on office work – all of which impact demand – they are going to be last in the queue to be reopened.”
…and the challenges ahead
Kate delivered a stark warning: “Reopening is just the start. It’s not the end.” It is, she continued, going to be a “long, slow recovery” for the hospitality sector. “Most of our businesses don’t think that they’re going to be back at ‘break even’ until the second half of next year. That’s a long period of low-profitability trading to get through and to be able to sustain.”
She said that the government will need to continue support for the sector – not least because “large parts are still fully closed”. And, without that support, “you’re going to lose businesses that are otherwise viable”.
Several potential areas for support were highlighted – including the “rent debt” that many businesses are accumulating; further holidays from, or reductions in, Business Rates; and means of funding people while they are in work.
This is not just important for the hospitality sector, said Kate, but also for many other sectors that rely on it: “It’s all very well having these big infrastructure projects, but you’re going to need somewhere for the builders to stay, somewhere for them to eat – because they often work away from home.”
There has been one other major development over the past 24 hours: the confirmation of a targeted lockdown in Leicester, until at least 18 July, to combat a rise in coronavirus cases in the area.
Matthew said that these local lockdowns “ought to be part of the solution, so we’re going to need to get good at them.” Sarah emphasised the point by adding that, without local lockdowns, we could be risking the pandemic getting “completely out of control across the whole country, leading to a full national lockdown again.”
Sarah also had advice for businesses who find themselves facing a local lockdown, whether in Leicester now or elsewhere in future: “It’s important to think not just about whether you are in that location, but are any of your staff travelling from there? You might have other business contacts there.”
“It’s easy to think that I’m not in Leicester, so I’m not affected – but you might be.”
Key questions we answered:
- Matthew, what can you tell us about the first local lockdown in Leicester, and the impact on businesses there?
- The UK’s first local lockdown has been announced in Leicester, which will see stricter measures imposed in the city. As a result, the wider national lockdown easing on 4July will not apply there, and from Tuesday 30 June non-essential retail will have to close.
- The people of Leicester must stay at home as much as they can and only essential travel is permitted to, from and within Leicester. Measures also apply to Oadby, Birstall and Glenfield.
- The government will review these measures in two weeks’ time.
- The government are supporting additional mobile testing units and a walk-in centre. It will also give extra funding to Leicester and Leicestershire councils to support them to enhance communications.
- Councils will ensure support is available for those who have to self-isolate and will work with workplaces that see clusters of cases to implement the guidelines more stringently.
- The CBI wants the health authorities, local and central government to all work together to clearly communicate to people and businesses alike in Leicester what they should do and what support they can expect. Firms need to know how lockdown will work in practice and what additional support those affected can draw upon.
- Given the likelihood of other local flare-ups, it’s essential a consistent approach is taken across England so firms know what to expect, can plan accordingly and protect their staff.
- Kate, how is the hospitality sector is planning for reopening this weekend? What do you expect and what do you fear?
- 71% of our businesses have said they are adopting a phased approach to reopening. So, not every business will open on 4 July.
- We anticipate 50-55% of hospitality businesses will reopen on or around this weekend.
- We expect businesses to reopen with around 70% of capacity to manage social distancing within the premises.
- Around 20% of consumers are looking to go to a pub and or restaurant this weekend – equating to roughly nine million people. While this sounds like a lot, it is a big reduction on usual numbers.
- Our primary fear is that customers do not follow social distancing.
- There is a big challenge about the Test and Trace requirements that are being introduced. We are not expecting the government to distribute the guidance on that until tomorrow. That doesn’t give our businesses, some of whom are small, a lot of time to prepare. The GDPR complications in taking down people’s details is something that is new to some.
- A lot of our businesses don’t think they will break even until the second half of next year.
- Sarah, what should businesses focus on to be Covid-secure?
- The guidance that Kate has alluded to is the right way for businesses to go. We think they should take that guidance and apply them to their specific context. Every business context will have its own differences.
- Make sure that you discuss this thoroughly with your staff who will implement it.
- The important thing about this is that the employees feel like they are playing their part. This breeds confidence and helps ensure a smooth rollout of the process.
- Kate, is the government going to help companies with rent debt? If not, it will be hard for businesses to avoid large-scale restructurings.
- Rent debt is an issue. The government will need to help on this.
- Changing the social distancing measures enables businesses to open and makes them more able to break even.
- But there are still large parts of the sector that are still closed and have no date to reopen. Business events, gyms, spas, bowling, music venues, conferences etc. are all still closed.
- Our key message to the Chancellor is that the rescue phase for these businesses is not over. If you don’t address this, it will be an anchor on our growth and recovery. You will lose jobs that didn’t need to be lost.
- We also need a job protection scheme to help fund staff, many of whom will come back on a part time basis.
- These businesses will need an extension of the tax deferrals and of the business rates holiday. Deferred tax is just debt by another name so we need a new way of paying that back otherwise businesses will fall.
- Stimulating demand would be helpful balanced against safety. For example, the chancellor could cut VAT to stimulate demand and get the supply chain restarted.
- Kate, what do you think of the proposed data gathering solutions from technology companies to help businesses? How should hospitality businesses respond to that?
- My message is to stop and pause if a technology company offers you a technology solution.
- Businesses should think carefully about investing in technology solutions before they know what the government guidance is.
- We also don’t know that these solutions may be what is required by the government.
- Just focus on getting information on the lead-booker coming to your establishment, their name, and telephone number for now.
- Kate, what is your advice for your members who are worried about opening this Saturday?
- This is what we do day in, day out. Those pubs where you have large numbers of people congregating have clear protocols in place for dealing with anti-social behaviour.
- There will inevitably be a sense of the media and some politicians looking for problems. So, we are advising our members to be overly cautious and go by the letter of the law.
- We are also encouraging our members to take responsibility for the immediate area outside the pubs as well.
- Sarah, how effective do you think local authorities are in carrying out inspections of businesses ahead of their reopening?
- Local authorities have already had a significant footfall in communities.
- Most on-the-spot inspections have found businesses have been doing the right thing.
- When we find businesses where concerns are raised, we are finding that they are very responsive to working with us to put things right.
- We always want to work as an enabling regulator as opposed to putting too much emphasis on enforcement when things don’t go right.
- We want to help businesses work with the flow of what the government are trying to do rather than wielding a big stick.