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Far from smoothie sailing

Written by  Li-Ann Chin, associate
Edited by David Gaffney, partner
25 November 2020

Good morning,

It has always been a secret dream of mine to open a juice and smoothie bar; a frivolous ambition I have cherished for years. For some reason, growing up, the hospitality industry struck me as strangely alluring. Today, I can only look on with sympathy at a sector that is struggling to stay afloat on the rough seas of this pandemic. 
 
Last Monday, the prime minister Boris Johnson unveiled his post-lockdown plans for England, which will see “toughened” three-tier regional measures return from 2 December. Yet again, it appears that the biggest casualty of the new restrictions will be the hospitality industry.
 
As it stands, a curfew of 11pm is expected to be enforced under Tier 1 restrictions, alcohol without a “substantial meal” will be prohibited within Tier 2 regions and Tier 3 is, in essence, a glorified lockdown. In Scotland, hospitality establishments under Level 1 are expected to close by 10:30pm while alcohol can only be served with a main meal under Level 2 regulations. Alcohol sale is prohibited within Level 3 areas and Level 4 will see hospitality establishments closed without exception. Eleven local authority areas across central and western Scotland are currently subjected to Level 4 restrictions.
 
These harsher measures have been branded “totally unacceptable” by Kate Nicholls, chief executive of UKHospitality, while Christopher Snowdon, head of lifestyle economics at the Institute of Economic Affairs, likened Tier 2 regulations to a death sentence for pubs and restaurants.
 
Indeed, the latest restrictions have dealt a severe blow to the already battered industry. Less than a week ago, a poll conducted by the British Beer and Pub Association, the British Institute of Innkeeping and UKHospitality revealed that 72% of hospitality firms fear becoming financially unviable and being forced to close permanently in the next year. Pre-Covid, the sector was valued at £133.5 billion but by February 2021, there will be 750,000 fewer jobs in the sector compared with earlier this year.
 
With a nail-biting few days before it is announced on Thursday which regions fall in each tier, there is exasperation within a sector that feels the government cannot expect businesses to switch themselves on and off at its will without suffering severe consequences. The positive vaccine news of the last few weeks has offered hope that some level of normality may return in the not-too-distant future, but without a systematic plan of action and targeted support for the hospitality sector, some people are worried that there won’t be much of an industry left to reopen.

News

Scotland has become the first country in the world to provide free and universal access to period products after the Period Products (Free Provision) (Scotland) Act was passed unanimously through its final stage at Holyrood on Tuesday evening, placing a legal duty on local authorities to make period products available for all those who need them.
 
Department for Education (DfE) statistics indicate between nine per cent and 11% of state school students – around 876,000 children – did not attend school due to Covid-related reasons on Thursday last week. Education unions say the current situation has “reached a crisis point” and have called on the government for more support.
 
The UK government has approached broadband providers, BT and Virgin Media to ensure 47 Covid vaccination centres in England have reliable connectivity, with a view to opening these locations by 1 December as part of the first tranche of dedicated inoculation units that will initially be used for NHS key workers. (£)
 
Following a meeting chaired by cabinet office minister Michael Gove with the first ministers of the devolved administrations, UK leaders have agreed that members of up to three different households will be able to form an exclusive bubble between 23 and 27 December. However, Scottish first minister Nicola Sturgeon has stated there might be some disagreement on the “precise definition” of households across the devolved nations.

Business and economy

Chancellor Rishi Sunak will set out the government’s spending review today, having confirmed in an announcement made yesterday that the plans will include £2.9bn for a new Restart jobs scheme and £1.4bn to expand the Jobcentre Plus agency. Earlier this month, official figures showed the UK’s unemployment rate rose to 4.8% in the three months to September, up from 4.5%. 
 
According to a recently published Equality and Human Rights Commission (EHRC) assessment, the Home Office was found to have broken equality law when it imposed its ‘”hostile environment” immigration policies, which contributed to the Windrush scandal. The Home Office said it was determined to “right the wrongs suffered” by those affected, while Labour said ministers should be “deeply ashamed” of the report’s findings.
 
In London, City Hall’s Conservatives are calling for the mayor Sadiq Khan to drop his rent control policy, after new analysis this week showed similar measures depleted Berlin’s supply of new flats. The new study showed the supply of rental apartments fell by 41% while demand soared by 172% within a year of Berlin’s rent freeze.
 
In a letter to the prime minister, companies including RWE and Uniper and prominent energy trading associations have called on the UK to adopt a carbon trading system and to reject plans for a tax after the Brexit transition ends, arguing that tradeable credits are the most efficient way to cut pollution. (£)

Columns of note

Following the Oxford University-AstraZeneca vaccine announcement on Monday, health secretary Matt Hancock has confirmed Britain’s plans to start administering a vaccine before Christmas. And yet, there is need for us to be cautious in our optimism, warns Nick Timothy in The Telegraph. Fundamental reform of the economy is still as important as ever and, if anything, we will be living with the cost of the virus for decades, he argues.
 
The UK government has been battered by criticism from all sides for failing to deal adequately with the Covid-19 crisis. Now it appears that its failure earlier this year to obtain sufficient stocks of personal protection equipment were due to a profligacy in procurement.  Writing in The TimesMelanie Phillips highlights how Covid cronyism has inadvertently destroyed public trust.

Cartoon source: Telegraph

Markets

What happened yesterday?

US stocks rallied toward records, oil surged past $45 and the dollar fell as the formal start of president-elect Joe Biden’s transition spurred investors into risk assets. Energy companies in the S&P 500 surged four per cent after oil topped $45 a barrel in New York for the first time since 6 March. The S&P 500 Index had risen 1.4% as of 11:39 a.m. New York time. Across the Atlantic, the FTSE 100 rose by 1.55% to 6432.17.
 
The pound gained 0.1% to $1.3333, the euro climbed 0.2% to $1.187. In terms of commodities, West Texas Intermediate crude surged 4.7% to $45.07 a barrel while gold futures weakened 1.9% to $1,809.30 an ounce.
 
In company news:
 
US clothing brand Abercrombie & Fitch is closing its flagship stores in London and six other locations, totalling about one-tenth of its space.
 
Europe’s largest hotel company, Accor, is merging a quarter of its brands into a new $1bn company, with the owner of the Hoxton hotel chain moving away from a traditional overnight accommodation model. (£)
 
Tesla’s market value has surged to more than $500bn, after a fresh wave of stock buying ahead of the electric carmaker’s debut on the blue-chip S&P 500 index next month.
 

What’s happening today?

Finals
Brewin Dolphin
Cambria Auto

Interims
Alpha Fin. Mkts
D4t4 Solutions
De La Rue
Helical Bar
Hicl Infrastructure
Liontrust Asset Management
Shearwater
United Utilities

AGMs
Berkeley Eng
Brand Architek.
Croma Security
Genus
Jpel Priv Eqty
Lon.fin&inv.grp
Red Emperor
Scs Group
Fulham Shore
Thor Mining

Int. economic announcements
(12:00) MBA Mortgages (US)
(13:30) Personal Consumption Expenditures (US)
(13:30) Initial Jobless Claims (US)
(13:30) Continuing Claims (US)
(13:30) Personal Income (US)
(13:30) Gross Domestic Product (US)
(13:30) Wholesales Inventories (US)
(13:30) Durable Goods Orders (US)
(13:30) Personal Spending (US)
(15:00) New Homes Sales (US)
(15:30) Crude Oil Inventories (US)

Source: Financial Times

did you know

In 2018, robbers in Belgium were told by a shop owner that he might have more cash for them to steal if they came back later in the day. When they returned three hours later, they were promptly arrested by police. Source: @qikipedia

Parliamentary highlights

House of Commons

Oral questions
Women and Equalities (including Topical Questions)
 
Prime Minister’s Question Time
 
Ten Minute Rule Motion
Driving Offences (Amendment) – Gerald Jones
 
Financial Statement
The Chancellor of the Exchequer will deliver the 2020 Spending Review alongside the Office For Budget Responsibility’s Latest Economic And Fiscal Forecast – Rishi Sunak
 
General debate
UK-Japan comprehensive economic partnership agreement
 
Adjournment
Mental health support in policing – Greg Smith

House of Lords 

Oral questions
Ensuring equitable access to vaccines and medical equipment to address the COVID-19 pandemic – Baroness Goudie
Establishing new lorry customs sites close to ports and near strategic road networks in Wales – Baroness Humphreys
Plans to review government policies towards nuclear weapons – Baroness Miller of Chilthorne Domer
 
Legislation
United Kingdom Internal Market Bill – report stage (day 3) – Lord Callanan

Scottish Parliament 

Ministerial Statement: Rollout of Testing Programme
Scottish Conservative Party Debate: Justice
Scottish Conservative Party Debate: Legal Advice
Members’ Business — S5M-22984 Jamie Greene: ICU at Inverclyde Royal Hospital

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