Lord: crisis is more damaging than covid
Lord said pubs, bars and restaurants are seeing outgoings triple and are in deeper trouble now than during the pandemic.
The combination of soaring inflation, energy bills, supply chain difficulties and wage increases have led to a “perfect storm tearing through the heart of the sector” and has called for the Government’s urgent return to parliament.
Speaking on Sky News on Tuesday 9 August, Lord said: “This is a crisis and we need immediate intervention. We need somebody to get a grip and we need strong leadership to get us through this.”
Inflation could peak at 13%
The warning comes as the Bank of England warns inflation – currently 9.4% – could peak at more than 13% over the next year with little respite in sight until before 2024.
Lord said energy bills in some hospitality venues have tripled with many expecting extra costs of between £15,000 to £20,000 by the end of the year.
Former Masterchef winner, Simon Wood, who is the manager of Wood Manchester, has reported an increase from £3,000 per month to almost £9,000 per month for utilities, despite opening only five days per week.
Lord warned: “The hospitality sector is one of the most integral parts of the UK economy and one that is now in an extremely perilous position, more so than during the Covid pandemic.
“Historical debt burdens racked up over the past two years, combined with the unrelenting economic pressures have created a perfect storm, which is tearing through the heart of the sector.”
Unimaginable scale of unemployment
He continued: “Trading is now unviable for many and I believe we will see closures at an unprecedented level over the 12 months leading to unemployment on an unimaginable scale.
“The speed at which the economic turmoil has devastated businesses in the sector is frightening and I am being contacted every day from landlords who are unable to continue to trade due to financial pressures.”
Lord has also called for the Government to implement a temporary reduction in VAT on business energy bills from 20% to 5%.
He said: “I have contacted the Chancellor, Nadhim Zahawi MP, to urge him and the Government to return to parliament. Urgent meetings with energy providers and leaders from across the industry are needed to discuss pragmatic solutions and reduce the financial burdens that landlords are facing. We must keep this sector afloat before it is too late, and to save the livelihoods of the hundreds of thousands of staff that the sector employs.”
