Life in limbo: British business pins its hopes on 'freedom day'

Final easing of restrictions on June 21 is key to recovery for thousands of companies

People enjoy the summer weather in London in June. While the UK government plans to lift lockdown restrictions completely on June 21, the final decision rests on hospital admissions and death rates. EShow more

Running an events and public relations company has been an uphill struggle for Tamika Martin over the past 14 months, with 95 per cent of the revenue from the events arm of her business wiped out by the pandemic.

Now Ms Martin faces another setback, with "freedom day" on June 21 – the final stage of the UK's road map out of lockdown when limits on social contact are to be lifted – now in jeopardy amid rising coronavirus cases.

While the government remains hopeful over the June 21 schedule, Prime Minister Boris Johnson said the country must be cautious and Health Secretary Matt Hancock said the final decision rested on hospital admissions and death rates.

The uncertainty is another blow for Ms Martin, who employs six people at Ucreate PR & Events Management and is planning an all-day, roller-skating silent disco in Nottingham, central England, on July 3 for up to 180 people with DJs and pop-up stalls.

“The venue is still to be decided because the outdoor spaces are hanging fire until June 21 before they confirm, which makes it very difficult for us in terms of marketing and promotion,” she said.

“The tickets for the event are about to go live, so if you're selling tickets and then all of a sudden you can't go ahead because the rules have changed, you’ve got to think about reimbursements. It’s painstaking.”

Ms Martin was planning to ramp up the events arm of her business, which accounted for 60 per cent of the company's income pre-pandemic, after months of cancellations or hosting online.

“We're not really making anything on events at the moment,” said Ms Martin, whose multi-service firm also offers PR and travel services. "We're renovating the whole business because if events are going to be touch and go, I can’t rely on them as a source of income otherwise we'll go bust.”

Mike Cherry, the national chairman of the Federation of Small Businesses, said shelving June 21 would “dash the hopes of thousands of businesses”, many in sectors prevented from operating since March last year.

"Small firms have suffered unprecedented and unpredictable disruption for 14 months, but the road map has given them confidence that they will finally be able to trade and recover," Mr Cherry told The National. "To rip away that hope would be devastating."

With many restrictions in the UK economy already lifted, pushing back freedom day would hit “people-focused” sectors such as events, hospitality and the arts hard.

June 21 is meant to signal stadiums, theatres and cinemas being packed out once again, with large-scale events, weddings and festivals also going ahead after 14 months of almost zero activity.

"Many such enterprises have said social distancing restrictions prevent them operating at a profit, so pushing back the June 21 date will have financial consequences, possibly to the extent that some smaller outlets find it more economical to simply temporarily close again," Stuart Cole, head macroeconomist at brokerage Equiti Capital, told The National.

With the UK registering more than 127,000 coronavirus deaths, the highest total in Europe, the government is wary of easing limits too fast as it faces controversy around its traffic-light system for international travel.

The first review of England's traffic light system last week saw no new destinations added to the green list, where travellers must be tested but do not have to quarantine on their return, while Portugal was demoted to the amber list and seven countries added to the red list.

Transport Secretary Grant Shapps said the government does not want to take any risks as it nears June 21.

However, with zero fatalities reported last week, more than half of the adult population fully vaccinated and the economy resurging as people move around more freely, business groups are urging Mr Johnson to stick to his road map.

The Independent Business Network, which represents family-run firms, said delaying the UK’s “freedom day” would be “entirely without merit".

“To not reopen would impede our economic opportunities and be devastating for sectors including entertainment and hospitality that have already been decimated by three consecutive lockdowns,” chairman John Longworth said.

The uncertainty leaves the hospitality sector facing an acute staffing crisis, after many workers moved into other jobs or left the country.

“The government must restore confidence in the hospitality sector so that it is again seen as a stable employer and provider of fulfilling careers,” said Kate Nicholls, chief executive of trade body UKHospitality.

“To facilitate this, it must stick to the reopening road map lifting all restrictions from June 21. This will restore consumer confidence and give a strong signal to workers that hospitality will bounce back strongly.”

Theatrical producer Andrew Lloyd Webber threatened to take ministers to court last week if they do not allow theatres to operate at full capacity from June 21.

The composer said it would be "the final death blow" if the move does not go ahead as planned.

While indoor entertainment venues were able to reopen on May 17 at half capacity, many theatres remained shut because it is not profitable to play to smaller audiences.

The events industry is also in chaos. Generating £11bn ($15.58bn) in economic activity and supporting 114,000 jobs pre-pandemic, the Events Industry Alliance said, it has effectively been shut since March 2020.

Celebrity wedding planner Liz Taylor said if the events sector does not return to some sort of normality in the next few months, it will be totally wiped out.

“If we're restricted again, then I doubt that anyone in the industry will have a business," she said.

Ms Taylor, who set up Manchester-based Taylor Lynn Corporation more than 30 years ago and has planned weddings for British stars such as Take That’s Howard Donald and TV presenters Eamonn Holmes and Ruth Langsford, has a wedding lined up in the UK for 140 guests on June 26.

“It's for a client that was originally due to get married in Italy who has already lost £30,000 because the venue would not refund,” she said.

“From the individual’s perspective, it's relatively catastrophic. I had a band coming in from Paris that she had her heart set on and then they announced that the French can't come into the UK. We are sitting on a date that we’re not sure will happen or not.”

A wedding on June 30 for 200 people was already scaled back because many family members were flying over from India, which is on the UK’s red list.

While Ms Taylor said the past 12 months were her worst since she set up in 1986, activity is ramping up with more than £3 million of business lined up for the next year.

However, she decided not to take deposits from clients for suppliers or venues to make it easier for events to be moved.

“My main concern was that people were not out of pocket,” she said. “We've lived with uncertainty for 18 months, now it's just managing it sensitively.”

Steve Cairns, director of Icebox Refrigerated Trailers, which supplies refrigeration for the outdoor events and catering sector, said the real concern was that such industries tend to rely heavily on summer activities.

"Many businesses will generate 70-80 per cent of their annual revenue during June to August. If they are unable to trade during that period, they have not just lost three months' worth of trading, they have lost the vast majority of their annual income," he told The National.

The business owner said his company would struggle if freedom day was postponed, however, it is still taking orders and advising clients they can reschedule free of charge.

“Ultimately, we need to work with our clients as we are all in this together,” he said. “The reality has been that many such support businesses have not survived, or have had to take on unforeseen debt to remain afloat in the hope of a return to 'normal' business.”

Meanwhile, Britain has shown promising signs of a strong recovery since the economy reopened on April 12.

The Bank of England expects 2021 to be the UK's strongest year of growth since the Second World War, with a surge in output of 7.25 per cent and the economy returning to its pre-pandemic level by the end of the year. It follows the worst recession in 300 years in 2020.

Britain's services sector recorded the biggest increase in activity in 24 years in May, when restaurants and cafes were allowed to resume serving customers indoors, the latest IHS Markit/CIPS Purchasing Managers' Index said.

Retail sales are surging, rising 9.2 per cent in April on the year, the Office for National Statistics said, while BoE data found in the same month that consumers saved the smallest amount since the pandemic began at £10.7bn, as the return of high street shopping unleashed a wave of pent-up demand.

However, a potential about-turn on reopening the economy is alarming for city centre businesses as companies would delay plans for workers to return to offices, meaning "a further hit to the myriad ancillary businesses office workers support", such as sandwich shops and taxi services, Mr Cole said.

“Plus, of course, rail and bus companies will continue to see subdued commuting revenue,” he said.

The proportion of British businesses open in the first half of May rose to its highest since June 2020 at 87 per cent, up from 83 per cent, ONS data found.

In turn, the proportion of employees on furlough sank to 8 per cent, equivalent to 2.1 million workers and the lowest level since October.

"The scheme is naturally winding down as people get back to work and take advantage of the opportunities out there in the jobs market," Chancellor of the Exchequer Rishi Sunak said.

However, he could be forced to extend support measures including the furlough scheme if restrictions are not eased, increasing borrowing even more, Mr Cole said.

While lockdown restrictions led to a reallocation of spending as opposed to a reduction, he said, a brief delay on reopening would cause this reallocation to continue.

But if consumer confidence takes a hit, Mr Cole said Britons might choose to stay at home, curtailing discretionary spending once more.

“A significant factor behind the upbeat outlook for the UK economy is an increase in consumption financed from the large stock of surplus savings built up over the pandemic," he said.

"Removing this consumption represents a big chunk of spending taken out of the economy, implying lower GDP growth going forward and the BoE deciding to continue providing the extreme support measures currently in place for longer."

For Ms Martin, the wait to find out if she can go full throttle this summer, coupled with an uncertain future, is agonising.

"We don't know what 2022 is going to look like either," she said.

Mr Cherry said if evidence around new variants leads to a delay or downgrade of full reopening, companies must be told as soon as possible.

“Rules should be consistent: localised lockdowns and restrictions did not work and were confusing," he said.

“Guidance should be consistent and clear for all.”