The whole of the East Midlands is being placed in the toughest Tier 3 category as the country comes out of the current four week lockdown.
The Government has said Derby and Derbyshire, Leicester and Leicestershire, Nottingham and Nottinghamshire as well as Lincolnshire will all be in the “Very High Alert” area from December 2.
East Midlands Chamber today said it was "devastating" news for so many businesses which will have to stay shut in the build-up to Christmas.
The county of Rutland is being placed in Tier 2 due to its lower and "improving" Covid-19 rate.
The Department of Health and Social Care has looked at the prevalence of Covid-19 across the region and although infection rates have been on a general downward curve in recent days it has judged they are still too high.
And rather than allowing some boroughs and districts within each country to be in different tiers, as happened under the last tier system, this time around the Government has decided to introduce county-wide measures.
Tier 3 areas will all have access to 20 minute testing regimes and the restrictions will be reviewed after a fortnight on December 16.
Although bad news for many local businesses, shops, including “non-essential shops” will be able open.
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The measures mean bars, shisha cafes, pubs, cafes and restaurants all stay closed, but will be permitted to continue sales by takeaway, click-and-collect, drive-through and home delivery.
Accommodation such as hotels, B&Bs, campsites, and guest houses must also stay closed – unless those venues are used as a main residence, and where they are necessary for work or education and training.
Also staying closed are indoor entertainment and tourism venues including indoor play areas, trampolining parks, casinos, bingo halls, bowling alleys, amusement arcades, cinemas, theatres and concert halls.
Zoos such as Twycross and theme parks such as Twin Lakes, near Melton, must also stay shut.
Drive-in public events can take place, though, and leisure and sports facilities can stay open, although group exercise classes are banned.
Although big public events can’t happen, big sport events such as rugby and football matches can continue – without spectators.
The new rules come in at 12.01am next Wednesday.
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Scott Knowles, chief executive of East Midlands Chamber of Commerce, said: “This will be hugely frustrating and devastating for many businesses in our region that have been placed into the highest tier of coronavirus restrictions, and comes as a further blow despite the relief of national lockdown coming to an end.
"It’s heaping uncertainty upon uncertainty, particularly for these sectors that have been hit hardest due to various restrictions since March this year.
“The festive period is hugely important to companies in sectors such as hospitality, which will be worst hit by restrictions forcing them to close other than for takeaways, and would usually help them build up cashflow during the quieter periods of January and February.
"Today’s tier allocation sends out the message Christmas is effectively cancelled for this segment of the economy.
“Even with the welcome news of a vaccine on the horizon, the country can’t afford to just sit and wait it out.
"Going forward, it is essential the Government reviews its tier structure frequently and doesn’t delay in easing restrictions as cases drop because every week that businesses are forced to close has a significant impact. This means it must also be prepared to offer additional targeted financial support where necessary.
“Westminster must be clear and timely in its communication on what the exit strategy is for these areas.
"Businesses have had enough of the purgatory stemming from the slapdash approach this has involved to date, and need to know well in advance when changes will take place so they can prepare for reopening.
"With Brexit drawing closer every day and a trade deal still some way off, firms are desperate for some certainty on how they will operate from January 2.”
Harborough, Oadby and Wigston MP Neil O'Brien said: "I know this news will come as a disappointment to many, but there are some encouraging signs in the latest data across the constituency and wider city and county [of Leicester and Leicestershire].
"It is moving in the right direction and this will carry on if we continue to follow the guidance and take all possible precautions, especially on households mixing which public health say has contributed to new cases.
"We should also remember that incredible progress has been made towards a vaccine and roll-out plans are being discussed/formed as we speak."
Councillor Chris Poulter, Leader of Derby City Council, said: “The more stringently we follow Derby’s ‘Very High’ restrictions, the faster transmission of Covid will drop.
“This will give Derby citizens and our businesses the best chance possible at eased measures sooner rather than later.
“During this period in Tier 3, we will be doing everything we can to offer support to vulnerable people, businesses and communities in general to ensure they are as safeguarded as possible against the effects of the restrictions.”
Dr Robyn Dewis, Director of Public Health, Derby City Council, said: “While the news of further severe restrictions may be disappointing, these measures are necessary for us to continue reducing the transmission of Covid in our community.
“We have started to see the impact of the national restrictions on the city’s case numbers, but there is still a way to go in our work to gain control of the virus.
“Doing the right thing for Derby by adhering to these restrictions now will hopefully prevent us from needing them any longer than necessary.
“We owe it to our loved ones, front line workers and businesses to do our bit by abiding by tier 3 measures – as well as our familiar, but extremely important - hygiene and social distancing guidelines.”
Life in Tier Three also means you must not meet socially indoors or in most outdoor places with anybody you do not live with, or who is not in your support bubble, this includes in any private garden or at most outdoor venues.