The UK government is currently ‘managing’ a health crisis, and at the same time creating a wealth crisis. Hospitality amidst CBILs storm that is brewing and growing stronger, by the day.
Hospitality Industry UK
Hospitality employs over 3 million people, and these people are dependent upon their employers staying afloat.
These employers contribute £130 billion to the economy. Contributions include GDP, VAT, NI, PAYE, and taxes to the exchequer.
The 3 million people employed, do not impact the government’s unemployment liability.
Government not walking the walk
Rishi Sunak announced billions in crisis loans at the onset of the Covid-19 lockdown to help businesses survive the crisis.
A month later only a tiny fraction, less than 1% has been approved by banks.
Sunak sounds and looks good, but has been found to be wanting, so far.
The government in the UK has to date failed on delivery as they are reliant on banks processing the loans.
International Comparison
The Swiss government has delivered 93% more money to 98% more businesses in half the time the UK took to get to 0.65%.
The US, France and Germany are all also well ahead of the UK.
US loans have been administered quickly, with a two year interest holiday and the ability to write off lockdown costs.
In France loans have been granted on a 5 year interest free basis and delivered within five days of application.
UK banks strangle cash flow for Hospitality amidst CBILs storm
UK banks have not moved one inch to help businesses by maintaining pre-crisis lending criteria. They have not recognised the request from the UK government to help UK businesses.
While UK banks may just ride through the Covid-19 storm oblivious to public opinion or any opinion, including the government’s. Many hospitality businesses won’t be able to.
Hospitality closed overnight on 20th March. Businesses dependent on customers walking in and spending money on 21st March were unable to serve them. It has continued daily since.
With no money coming into hospitality businesses for more than a month now, many have died. Many more will die, and we will not see some of the best names in hospitality again. The Covid-19 pandemic has cut off the oxygen that enables businesses to breath, cash flow.
Economic storm brews
The economic storm that is brewing, is getting stronger by the day. The empty promises of financial help for business from government are looking like a financial vacuum. Blaming banks will not provide political shelter for the government from the storm. It’s the same as inadequate PPE, it’s inadequate.
Government forgets businesses
The government may have also forgotten that a landslide election victory can very quickly erode in the face of failure. The Conservative Party has always been seen as a party that supports business. Current actions would challenge this, and Rishi Sunak may soon be looking for another new job.
The Covid-19 pandemic is also being featured in our Facebook and twitter social media.