Lockdown could cost the economy £8billion a fortnight, kill hundreds of thousands of jobs and trigger “obliteration” for the hospitality sector.
Plans for tighter restrictions landed on the day the £50billion furlough scheme ended, with a less generous replacement branded inadequate by business groups.
It is feared the double whammy will force one in four pubs into the abyss.
Thousands of landlords say they will be forced out of business during the run up to Christmas unless the Government beefs up support for jobs and business.
The British Beer and Pub Association has demanded cash for pubs and compensation for brewers to avoid the sector being devastated.
Chief executive Emma McClarkin said: “The evidence is clear that pubs are Covid-secure – particularly in areas with lower infection rates.
“Locking them down across the country would be counterproductive and hugely damaging.
“Without the right support it would also destine thousands of our pubs and jobs to complete obliteration, as well as major disruption to supply chains and Britain’s’ brewers.
“The Government must ensure the same, if not greater, levels of support are provided as they were the first time round.
“That means a job support package that guarantees incomes, grants for all pubs to cover ongoing fixed costs, and compensation for brewers who will also be devastated by another lockdown.
“Without this level of support it could be fatal for many pubs and brewers.”
UK Hospitality’s Kate Nicholls said the Job Support Scheme brought in to replace the furlough programme did not go far enough, providing 67% of wages rather than 80% under the old scheme.
And group fears one in four pubs, restaurants and hospitality firms could go bust as a result of a new lockdown. She said: “Many of our businesses are already in jeopardy –resilience is at rockbottom.
“If we are to have another national lockdown, we are going to need additional help to get through this.”
The cost of a second lockdown to the economy has been estimated at up to £8billion every two weeks, by the Institute of Economic Affairs think-tank.
Long-term unemployment fell to below 300,000 earlier this year, or less than 1 per cent of the workforce. But rising to 1.6million would push it up to almost one worker in 20, levels not seen since the early 1990s.
The youngest and oldest workers will bear the brunt of the jobs disaster, says the Learning and Work Institute think tank.
Workers in manufacturing, construction, retail and wholesale are likely to be worst hit, with lower-skilled staff most vulnerable, if the pattern of previous recessions is repeated, it says.
Those in London, Merseyside, South Yorkshire and the West Midlands are most at risk.
Britain is already heading for its biggest budget deficit – where yearly spending outstrips tax receipts – since the Second World War, due to the soaring costs of the pandemic.
Annual borrowing is expected to hit £320billion by next April – almost £5,000 a year for every man, woman and child in the UK.
TUC general secretary Frances O’Grady said: “Lockdown will only work if people aren’t worried about their livelihoods.
“If the country is locked down again, Government support for workers and businesses should be no less than it was in March. That means a wage subsidy of at least 80 per cent for all those unable to work.
“And there must be a similar level of support for self-employed workers.
“We must also learn lessons from the last lockdown. We need decent sick pay for all, worth at least the real living wage, so that everyone can afford to self-isolate.”
Helen Dickinson, of the British Retail Consortium, said: “There is no circumstance in which any retail premises should have to close in a second national lockdown.
“In April and May, non-essential shops were losing £1.6billion a week in sales. Now that we are entering the Christmas shopping period, these losses are certain to be much bigger.”
Gary Forrest, chief exec of north east hospitality chain the High Street Group, said the criticaal festive season had been blown apart.
He said: “People are trying to book Christmas parties, we don’t know if we can accept them – it’s tending towards being a total disaster.
“The hospitality industry cannot afford to have a poor December.”
This week Channel 4’s Dispatches highlights the job crisis, following a job advert for a minimum wage server at Manchester restaurant, Peru Perdu.
Normally a similar job would get 20 to 30 applicants, but 947 applied for it.
Recruiter Abi Dunn said: “I’m shocked by that and it’s a real indication of where the sector is at.
“There’s managers applying for roles, there’s cabin crew applying, there’s people from lots of different sectors.”