UK businesses fear omicron will worsen staff shortages and derail recovery

Call for reintroduction of Statutory Sick Pay from day one as case numbers surge

UK businesses have warned that the "tidal wave" of omicron Covid cases spreading across the country will derail their recovery and worsen an acute shortage of labour.

Boris Johnson has ordered people in England to work from home wherever possible in an attempt to slow the rapid spread of the new variant, with around 200,000 people now thought to be being infected with it each day.

The latest guidance does little to help large swathes of the economy, including the manufacturing and hospitality industries which fear that hundreds of thousands of workers may soon need to self-isolate.

"Manufacturers are more at risk than other businesses because they aren’t able to work from home,” said Verity Davidge, policy manager of trade body Make UK. “We are concerned by the increasing numbers of cases will mean that large numbers of people will be off sick.”

Ms Davidge welcomed a change in the rules which means close contacts of confirmed cases will be able to go to work if they continue to test negative.

While that may help to avoid a repeat of the “pingdemic” in the summer, many businesses are nervous about employees continuing to come into work if they are showing symptoms, Ms Davidge said.

Make UK is calling for the reintroduction of Statutory Sick Pay from the first day that someone is unable to work. It currently only kicks in on the fourth day, potentially incentivising people to go to work when they should stay home.

"A lot of manufacturers are just beginning to see order books pick up, just beginning to see demand come back but they always have that concern about further restrictions and lockdowns.

"There is a huge amount of nervousness amongst industry that just as green shoots were appearing we may see those order books falling again."

Ms Davidge also urged the government to commit to reintroducing support including the furlough scheme or something similar if large numbers of staff are off sick with omicron and the economy takes a hit.

Restaurants and pubs warned that they have already taken a big hit from order cancellations, and face further problems if staff are unable to work.

A poll of 200 restaurant businesses by Flipdish found 85 per cent of those surveyed are struggling to hire staff. If omicron causes another lockdown, the average restaurant only has enough cash to survive 10 weeks, according to the survey,

Four in 10 restaurant owners said they think it will take between two and 10 years to fully recover financially from the pandemic.

“The UK Government needs to understand the severity of the situation for pubs, social clubs, brewers, and cider makers,” said Nick Antona, chair of the Campaign for Real Ale (Camra)

“Before the announced move to Plan B restrictions in England, the sector was already facing an employment, supply chain, and cost of goods crisis, as well as trade remaining below pre-pandemic levels.

“It is imperative that governments across the UK exercise extreme caution and understand the impact of any statements that they make about cancelling social plans.

Restaurant owners fear that a renewed reluctance to go out will mean they are once again becoming more reliant on platforms such as Deliveroo and Just Eat.

Delivery apps have enjoyed bumper revenues since the pandemic began but have been criticised for eating up a hefty slice of restaurants’ sales and profits.

“We are up against it this year," said Rahul Sharma, Director at The Regency Club in London. "Staff shortages have been severely impacting the business when we’re open and the threat of closure from omicron is hanging over us too.”

Regency had 194 cancellations in the three days after news of the omicron variant was first reported.

"That’s why it’s been so important for us to protect our margin this year and one way to do so is to avoid the aggregators,” he added.

Peter Backman, international restaurant and delivery analyst, said: “Many operators, who have previously steered clear of delivery, added a delivery and click & collect offering during the pandemic.

“As a result, the tech giants have seen revenues from commissions surge. For restaurants, giving up to 30 per cent of revenues to middlemen is not ideal for the bottom line.”