Wetherspoon today called on the Government to open its pubs at the same time as non-essential shops as bars remain shut across Britain during the third lockdown.
Ministers are said to be considering plans to allow hospitality firms to serve customers outside by Easter, which falls on the weekend of April 2.
But a full reopening is not expected until May at the earliest – and Wetherspoon boss Tim Martin warned that the industry is ‘on its knees’ and must reopen to save jobs.
It comes as Mitchells & Butlers, which owns All Bar One, Toby Carvery and Harvester said it will raise £350million from its largest investors to shore up its finances.
The developments follow a bust-up between pub groups and the Government which has seen companies pull out of regular business roundtables in frustration.
Wetherspoon chairman Tim Martin at the Hamilton Hall pub in London on October 16 last year
|PAYE and NIC||106.6||121.4||109.2||96.2||95.1||84.8||78.4||70.2||67.1||65.2|
|Corporation tax credit (historic capital allowances)||0||0||0||0||0||-2.0||0||0||0||0|
|Climate change levies||6.1||10.4||9.2||9.7||8.7||6.4||6.3||4.3||1.9||1.6|
|Premise licence and TV licences||1.1||0.8||0.7||0.8||0.8||1.6||0.7||0.7||0.5||0.4|
|Furlough Tax Rebate||-124.1||0||0||0||0||0||0||0||0||0|
|TAX PER PUB (£000)||528||871||825||768||705||673||662||632||617||560|
|TAX AS % of NET SALES||34.6%||42.0%||43.0%||41.8%||42.1%||41.8%||42.6%||43.1%||43.4%||43.0%|
|Source: J D Wetherspoon plc Annual Reports and Accounts 2012 – 2020|
Today, Mr Martin spoke of the huge contribution pubs make to the economy, with Wetherspoon alone paying about £10 of tax for every pound of profit it makes.
He said: ‘In the last 10 years Wetherspoon has generated £6.1 billion of taxes, something we are very proud of.
High Street stores are set to reopen in weeks
High Street shops will be allowed to reopen within weeks if Covid infection rates keep dropping.
Plans to ease lockdown were boosted yesterday by figures showing the dramatic impact vaccines are already having.
And there is growing hope families will be able to meet outside by Easter as restrictions are gradually lifted.
Boris Johnson last night confirmed the country had hit its target of 15million vaccinations two days ahead of schedule.
The Prime Minister said the number of new cases has already dropped ‘very considerably’, preparing the way for lockdown measures to be relaxed.
Mr Johnson will publish a detailed roadmap setting out his plan for lifting the national lockdown in England next Monday, starting on March 8 with the return of schools and allowing people to meet one friend for coffee on a park bench.
The blueprint will avoid setting hard-and-fast dates for subsequent stages, but will lay out the sequence in which restrictions will be lifted.
The reopening of high street shops, which have been closed since at least the start of January, will come next after schools.
Government sources expect this will happen towards the end of March, or the beginning of April at the latest.
Mr Johnson also wants to bring back the rule of six for outdoor gatherings, which would allow families to meet in groups for walks or picnics.
But at first, travel restrictions will remain in place meaning people will only be able to see relatives who live nearby. Eventually, all remaining businesses including pubs and restaurants will be allowed to open their doors.
‘In the financial year to July 2019, before the pandemic, Wetherspoon, its customers and employees generated £764 million of taxes – £1 in every thousand collected by the UK Government.
‘Many people have correctly pointed out that the three lockdowns of the last year have been a disaster for the hospitality, retail, arts and entertainment industries, but our calculations show that they have been an even bigger disaster for public finances.
‘The taxes paid by Wetherspoon are mirrored by thousands of companies which have been annihilated by lockdowns.
‘As a result, government finances have been annihilated even more.’
Mr Martin said Wetherspoon has registered more than 50 million customer visits to its pubs, using the Test and Trace system, without a single outbreak of Covid-19, as defined by the health authorities.
He maintained that hospitality groups have provided the Government with information that ‘clearly demonstrates’ that pubs and restaurants are Covid-secure environments, following the investment of hundreds of millions of pounds in safety and hygiene measures.
‘The Government knows this is correct, since it has access to Test and Trace information.
‘Yet the Government has ignored this information and has even banned golf – the ultimate social distancing sport.’
He added: ‘Surely it is possible for the hospitality industry to reopen at the same time as non-essential shops, now that a vaccine exists, on the basis of the social distancing and hygiene regulations.
‘Unless the industry does reopen on that basis, economic mayhem will inevitably follow.’
Meanwhile Mitchells & Butlers is raising £350 million from its largest investors. It said it will issue about 167 million new ordinary shares with a subscription price of 210p per share.
The group, which also owns Toby Carvery and Harvester, said a consortium of three of its largest investors has said it will be able to make the whole £350m available.
Piedmont, Elpida Group and Smoothfield have joined forced to create a new holding company, Odyzean, holding 55 per cent of the company.
The firms said the new company will help address ‘the significant capital needs of Mitchells & Butlers’.
Odyzean said it is fully supportive of the current management team but that it plans to review the current composition of the board of directors.
Mitchells & Butlers, which owns All Bar One (a branch of which is pictured in London last August), said it will raise £350million from its largest investors to shore up its finances
A man passes closed pubs and restaurants in Covent Garden in London last December
A spokesman said: ‘Without this major equity injection, the prospects for the business, its 1,600 venues, and over 40,000 UK employees would be bleak.
TIM MARTIN: Surely it is possible for hospitality to reopen at the same time as non-essential shops
Wetherspoon chairman Tim Martin
In the last ten years Wetherspoon has generated £6.1 billion of taxes, something we are very proud of.
In the financial year to July 2019, before the pandemic, Wetherspoon, its customers and employees generated £764 million of taxes (please see table below), one pound in every thousand collected by the UK government.
The amount of tax paid by Wetherspoon is replicated, according to the size of the company, throughout the pub industry, and shows just how important pubs are to the economy.
Many people have correctly pointed out that the three lockdowns of the last year have been a disaster for the hospitality, retail, arts and entertainment industries, but our calculations show that they have been an even bigger disaster for public finances.
The taxes paid by Wetherspoon are mirrored by thousands of companies which have been annihilated by lockdowns.
As a result, government finances have been annihilated even more.
Since pubs reopened last summer, following the first lockdown, Wetherspoon has registered more than 50 million customer visits to its pubs, using the test and trace system, without a single outbreak of Covid-19, as defined by the health authorities, among customers in our pubs.
Industry organisations UK Hospitality and the BBPA have provided the government with information that clearly demonstrates that pubs and restaurants are Covid- secure environments, following the investment of hundreds of millions of pounds in safety and hygiene measures.
The government knows this is correct, since it has access to test and trace information.
As the BBPA has pointed out, outbreaks have been concentrated in environments such as care homes, households and hospitals.
Yet the government has ignored this information and has even banned golf – the ultimate social distancing sport.
The big worry in the hospitality industry is that the government is playing a PR game, creating an illusion of positive action, and will find an excuse to tie the industry down with restrictions by, for example, allowing outside eating and drinking only when the pubs reopen – as a result the entire industry would be heavily loss making.
Since the 1970s, UK governments have run out of money three times when they’ve paid insufficient attention to financial common sense.
The last time was in the Great Recession in 2010 when the Chief Secretary to the Treasury said: ‘ I’m afraid there is no money.’
Before that, billions were spent in an effort to remain in the disastrous exchange rate mechanism in 1992, and in the 1970s the government had to rely on financial aid from the IMF.
However, this government is spending money at a faster rate than any government in history,
In spite of that, around a million UK jobs have been lost already.
Surely it is possible for the hospitality industry to reopen at the same time as non-essential shops, now that a vaccine exists, on the basis of the social distancing and hygiene regulations, which were agreed with the health authorities, after full consultation, for the July 4 reopening last year.
Unless the industry does reopen on that basis, economic mayhem will inevitably follow.
‘Our significant financial commitment will help to secure the future of the business and provide a platform for the strong management team to restore the company’s operations to good health when circumstances allow.’
Mitchells & Butlers also told investors that it has secured an agreement with banks for a new £150 million credit facility as part of the financial shake-up.
Last month, the pub owner said it had only £125 million in cash reserves and was burning through between £35 million and £40 million each month its sites remain shut.
Chairman Bob Ivell said: ‘We are pleased to have received the support of our major shareholders and key creditors.
‘Mitchells & Butlers was a high-performing business going into the pandemic and this capital raising and refinancing will provide the business with the certainty of funding that it needs in order to emerge in a stronger position to take advantage of its strong property portfolio, well known brands and operational expertise in order to win market share and continue its long-term strategy of deleveraging and driving value creation for shareholders.’
It comes as pub bosses yesterday demanded the return of inside drinking in April – and called plans to only reopen beer gardens ‘laughable’.
Patrick Dardis, chief executive of the Young’s pubs chain, said wet weather would make the outdoors-only idea unworkable and a partial reopening would not be viable for many landlords.
The threat of being closed until May has infuriated industry leaders, who yesterday backed demands by Tory MPs for lockdown restrictions to be fully lifted by the end of April, when most over-50s are expected to have been vaccinated.
Mr Dardis yesterday said: ‘There is talk about opening pub gardens but I’m afraid that is just nonsense. It is a ridiculous idea that you can just open up in outside spaces.
‘This is the United Kingdom. Yes, of course, you occasionally get a half-decent spring and a good summer but it is mostly wet and cold. So what would be the point?
‘It demonstrates that certain people in government have lost touch with the public on this and just do not understand.’
He said Young’s, which has more than 200 pubs mostly in the South East, was losing £5million a month even after receiving state support such as business rates relief.
Mr Dardis, 61, added: ‘Every pub company in the land is burning through millions and millions of pounds every month we are closed – and most cannot afford to keep going for much longer.
‘On what basis are they making these rules? It is just laughable – as was the 10pm curfew, as was the nonsense about what a ‘substantial meal’ was. When pubs opened last summer more than £500million was spent [making them Covid-safe]. But there is absolutely no evidence whatsoever to suggest that the infection rate grew as a consequence of pubs being open.’
Mr Dardis has written to Boris Johnson criticising the Government’s ‘obvious lack of interest and respect’ towards the sector and argued that pubs should reopen in April.
Food delivery firm Deliveroo and 300 restaurant groups also called on the Government to help the hospitality industry yesterday and suggested that Chancellor Rishi Sunak should revive the Eat Out to Help Out scheme when they are allowed to reopen.
However, scientists have continued to urge caution over the easing of restrictions when Mr Johnson reveals his ‘road map’ out of lockdown for England next week.
Dr Bharat Pankhania, senior clinical lecturer at the University of Exeter medical school, said calls to reopen pubs in April were premature.
He said: ‘What the executives of pubs need to know is that failure to get it right equals back to square one. And back to square one equals much more pain economically, much more hardship.’
A Government spokesman said: ‘We are deeply disappointed that some pub leaders have decided to step back from meetings with ministers.
‘As we plan our way out of restrictions, we will continue to engage relentlessly with the hospitality sector, as we have done throughout this pandemic.’