One of Britain’s leading entrepreneurs has issued a stark warning of tougher economic times ahead, suggesting the UK could face another “Great Depression”.
Luke Johnson, a former chairman of Pizza Express, urged the government to ramp up testing for people who may not have COVID-19, the disease caused by coronavirus, in a bid to get the country to go back to normal.
Speaking on Sky News’ Ian King Live on Wednesday, he said: “The longer this shutdown continues, the more industry will generally shut down and become insolvent.
“I think there is a terrible trade-off the country will have to make at some point in the very near future about the damage to our whole standard of living and whether we are willing to accept the suicides and all the collateral damage of the shutdown, as opposed to protecting the NHS so it can keep people with the virus alive.”
“We could be facing a downturn closer to the Great Depression”
A grim warning from restaurant entrepreneur @LukeJohnsonRCP about the “terrible trade-off” he claims the country is going to have to make between the health of the NHS and the health of the economy. pic.twitter.com/nlIiG5Xasa
— Tom Boadle (@TomBoadle) April 1, 2020
Mr Johnson added: “I think we could well be facing a downturn that isn’t just an average recession but is closer to something like the Great Depression from the 1930s.
“If you look at the misery and ill health that caused and the damage to society as a whole there is a serious debate to be had to see if we are relentlessly pursuing the right course of action.”
He revealed “several hundred” of his staff at Risk Capital Partners – which owns a stake in companies such as Gail’s Bakery, the Giraffe restaurant chain and Brighton Pier – were currently on the government’s furlough scheme but stressed his concerns about it meeting payroll deadlines.
“I think the earliest we’re hoping to get money is later on this month, it may not be until May,” he added.
“For some businesses that will be too late because the companies will not be able to pay their colleagues for even the March payroll, let alone the April one.”
The Great Depression was the longest, deepest, and most widespread depression of the 20th century.
It started in the United States after a major fall in stock prices that began around 4 September 1929 and saw the worldwide gross domestic product (GDP) fall by an estimated 15% between 1929 to 1932.
Mr Johnson is credited with turning Pizza Express into one of the nation’s favourite Italian chains before selling it in 1999.
Mr Johnson was also previously chairman of crisis-hit French cafe chain Patisserie Valerie, which collapsed into administration last year after allegations of fraud.
He previously described the revelation of alleged accounting fraud at the high street cake chain as a “nightmare parallel universe”.