Hospitality job losses will be ‘far higher’ than expected

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Photo: Han Yan Jon Super/Xinhua News Agency/PA Images

Far more pub, bar and restaurant workers than previously thought are likely to lose their jobs by the end of the year as local lockdowns, the 10pm curfew, working from home and plummeting confidence among consumers take their toll.

In a Commons Treasury Committee evidence hearing yesterday, MPs were warned more than 900,000 people in the hospitality sector remained on full-time furlough and a further 400,000 on part-time furlough.

You will have insolvent business, businesses going into administration, and therefore that engine of growth for re-employing people will be lost for good” – Kate Nicholls, UKHospitality

Kate Nicholls, chief executive of UKHospitality, told MPs: “There is a large chunk of the hospitality sector that is still in stasis, cannot reopen. One in five premises are restricted by legislation from reopening – large parts of the night-time economy, events and functions in our hotels and conference centres.”

She said that second wave of Covid restrictions are not hitting all sections of the economy equally and that sector-specific support was needed.

Nicholls said: “We fear that as a result, unless there are amendments for those sectors… you won’t avoid the cliff edge in October.”

Speaking of the workers still on furlough she added: “We are trying our best to bring as many of those workers back to retain that vital link between employer and employee by bring people back for short-time work [but the Job Support Scheme] unfortunately doesn’t provide enough support for those sectors of the economy that are subject to legislative restriction.”

Until the end of the month, the government’s furlough scheme covers 60% of wages but from 1 November the Job Support Scheme, which is only available if staff can work at least one third of their normal hours, covers just 22% – the employer has to fund at least 55% of pay.

“You will have insolvent business, businesses going into administration, and therefore that engine of growth for re-employing people will be lost for good.”

UKHospitality had previously forecast 560,000 people in the industry would lose their jobs by the end of 2020 but Nicholls said the number will be much more after new restrictions were introduced in the last two weeks.

“We are doing that data again but we anticipate it will be far higher due to local restrictions, the national constraints on events, working from home and the curfew,” she told MPs.

Nicholls singled out the curfew as having a devastating impact. “Businesses are feeling the cumulative impact of all the restrictions placed on them, but they have really suffered since the introduction of the curfew. The curfew has wiped away revenue from businesses that were only just clinging on. For many, it has tipped them into financial unviability.

“We have no staggered ending like we have seen in Ireland and Wales. Other European countries have a later curfew point, with last orders at 11 and closure at 12, which eases the pressure.

“The regulatory impact on businesses needs to be considered, particularly when so low a number of outbreaks are linked to hospitality. We urge the government to rethink the curfew so that it can deliver the public health objective without damaging businesses and risking further job losses. We also need an immediate and comprehensive package of support to keep businesses alive and prevent redundancies on a large scale.”