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Prime Minister Boris Johnson relaxes lockdown measures in England: What does this mean for SMEs?

Written by Latifa Yedroudj on Wednesday, 24 June 2020. Posted in Politics, Analysis

Pubs, restaurants, hotels and hairdressers and other hospitality businesses are set to reopen from 4 July

Prime Minister Boris Johnson relaxes lockdown measures in England: What does this mean for SMEs?

Pubs, restaurants, hotels and hairdressers and other hospitality businesses are set to reopen from 4 July 

Prime Minister Boris Johnson has announced massive plans to put an end to “national hibernation” and reopen shops on July 4, as part of the most significant relaxation on coronavirus restrictions since lockdown was implemented in March. With plans to partially reopen businesses in the hospitality industry and restart the country’s economy, what are the next steps for UK SMEs?

Cinemas, restaurants, pubs, hotels, hairdressers and museums, theme parks and zoos are among some businesses in England allowed to reopen from July 4 onwards - but the government warned venues must take protective measures to prevent the spread of the virus. However, not all businesses are allowed to open their doors just yet. Places like indoor gyms, swimming pools, nail bars and indoor play areas and nightclubs will remain closed for the moment, which have remained shut down since lockdown started on March 23. Mr Johnson has also announced plans to introduce a “one metre plus” rule for social distancing, but said people should remain 2 metres apart when possible. Other amenities are allowed to reopen, as long as they adhere to ‘Covid secure’ guidelines including hotels and other forms of accommodation, places of worship, libraries, community centres, outdoor playgrounds and outdoor gyms, and indoor leisure centres and social clubs. Venues must maintain social distancing where possible and manage transmission risk while reinforcing cleaning processes.

With the lockdown measures partially lifted on businesses, this signals the first step to boosting England’s hospitality industry since the country went into lockdown earlier in March. Several business leaders have given their thumbs up to the new steps taken by the government to kickstart Britain’s economy and get businesses back on track.

“Insuring over 400,000 UK small businesses means we’ve been able to see first-hand the impact of lockdown on their operations,” Alan Thomas, UK CEO of small business insurance provider Simply Business said. “With 67% of small businesses being forced to stop trading, the financial consequences have been huge – and few industries have been hit harder than hospitality. We welcome the Prime Minister’s announcement regarding the imminent reopening of this crucial sector, and today’s confirmation will allow over 25,000 Simply Business customers in this industry to confidently and safely go back to work – resuming operations whilst respecting the revised guidelines on social distancing. The news means many small business owners up and down the country can begin reviving their livelihoods – something which should have a positive impact on communities, families and consumers. “We know small businesses – especially those in the hospitality industry – will be crucial as we look to kickstart the economy, and we’re proud to be supporting the individuals set to have such a positive influence on this rebuild.”

However, some business leaders have urged the government to take extra steps in providing SMEs with further financial support to continue to drive growth to the economy as thousands of companies transition back to normal. “We’re pleased that the Government has also listened to industry and is on the verge of agreeing ‘air corridors’ with a number of countries, a step that signals that the UK’s tourism inbound industry is keen to welcome international tourists again,” Joss Croft, CEO, UKinbound. “Although these measures are very much to be welcomed, Government needs to recognise that whilst some businesses will hopefully be able to recoup a small proportion of their losses over the much shorter summer season, many businesses, especially those that rely wholly or mostly on inbound tourism, will have gone through the equivalent of ‘three winters’ and will need further financial support if they are to survive and continue to drive jobs and growth across the UK.”

Jane Pendlebury, the CEO of HOSPA, the Hospitality Professionals Association has insisted that even though safety is paramount, businesses need to quickly adapt to social distancing with their customers as this could have an overall impact on their business and revenue. “Reducing the social distancing measures then will have a huge impact. To outline the difference it makes, revenue management modelling suggests that 2-metre social distancing, which effectively creates a 4-metre diameter, reduces restaurant revenue to as little as 7% – a non-viable return given the factors involved. This changes considerably though as the distance is reduced. The proposed 1-metre distancing, equating to a 2-metre diameter of space, allows for around 45% of revenue,” Ms Pendlebury said. “While this is still a huge reduction, if hoteliers and other restaurateurs are creative in their approach, they can work to increase those margins by implementing a variety of measures. This would at least gives them a chance to head in the right direction, enabling the opportunity to develop a workable service. Of course, safety is paramount and our priority is opening safely, for both guests and staff, but this offers the industry, if not exactly an open door to a return, then certainly a workable margin. No doubt there’ll be muted celebrations in hotels all around the country as we look to start moving forward again.”

With the easing of lockdown measures, Mr Johnson cautioned that there could be local outbreaks and that the changes could be reversible if the virus were to go out of control again. The Prime Minister said in his speech at Downing Street on Tuesday: "This is a nasty virus still that wants to take advantage of our carelessness. I'm afraid there will be local outbreaks. And I must tell you that if the virus were to begin to run out of control, I will not hesitate to put on the handbrake and reverse some of these changes at local or indeed national level as required."

Thousands of companies across England will now be able kickstart their operations and return back to business post-lockdown. It is essential the government provided additional support to SMEs and give them the help they need during this transition. Businesses must also take precautions and keep up with their protective measures to ensure both their employees and customers stay safe.

About the Author

Latifa Yedroudj

Latifa Yedroudj

Latifa Yedroudj has joined the Elite team to fully immerse herself in the business side of journalism, a strong passion of hers cultivated from young having co-run her mother's start up business since she was 18. Her interests lie in a wide range of subjects, including start ups, business, travel, and anything entrepreneurial she can get her hands on. She has worked for some of the biggest names in journalism including The Guardian and The Mirror. Follow her on @latifayed on Twitter for her latest journo rants.

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