Hospitality chiefs warn job losses could be 'far higher' than 500,000

Hospitality chiefs tell MPs pubs, restaurants and bars will lose ‘far higher’ than half a million jobs by the end of 2020 because of 10pm curfew and local lockdowns

  • UKHospitality said industry is braced for hundreds of thousands of job losses 
  • It blamed the 10pm curfew, local lockdowns and lack of customer confidence
  • Furlough ends later this month, will be replaced by less generous jobs scheme

Hospitality bosses have told MPs that pubs, bars and restaurants are braced for job losses ‘far higher’ than half a million by the end of the year. 

The UKHospitality industry body told the Treasury Select Committee that a combination of the Government’s 10pm curfew, local lockdowns and a drop in customer confidence had hit businesses hard. 

Kate Nicholls, chief executive of the group, said around 900,000 hospitality workers remain on full furlough payments as parts of the sector remain ‘in stasis’.

She said the group anticipated 560,000 additional job losses by the end of the year, following research two weeks ago, but now expects redundancies to be even higher than that.

‘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 said.

Chancellor Rishi Sunak is closing the Government’s furlough scheme at the end of October. 

Hospitality chiefs are bracing for massive job losses before the end of the year. After-work drinkers enjoy a pint in Borough Market, London, on September 25

Hospitality chiefs have blamed the Government’s 10pm curfew and local lockdowns for the dire situation facing some pubs, bars and restaurants. Soho in London is pictured on October 4 just after 10pm

It is being replaced with a significantly less generous Jobs Support Scheme which will focus on propping up ‘viable jobs’ rather than ‘zombie’ ones with no future. 

Ms Nicholls sounded the alarm that redundancies are expected to spike when furlough ends as she called for tailored support to be brought forward for the hospitality sector.  

She told MPs: ‘We fear that unless there are amendments for those areas which are particularly hit, you won’t avoid the cliff edge in October and we have got large numbers of redundancies that are forecast in October because of how the jobs support scheme is set up.

‘There is a very real danger that we will lose large chunks of the economy – in hospitality we will have insolvent businesses, businesses going into administration and therefore that engine of growth for re-employing people will be lost for good.

‘I think that’s what we need to be focusing on to make sure we support viable jobs for the future.

‘In our sector, those on full-time and part-time furlough are in viable jobs in the long term.’ 

Furlough has seen the Government pay 80 per cent of an employee’s wages up to a monthly maximum of £2,500. 

The new Jobs Support Scheme will see the Government pay up to 22 per cent of wages for workers who are able to work part-time from November 1.  

Ms Nicholls told MPs that sector operators said recent coronavirus restrictions have ‘moved them back to the trading levels they saw at the start of July’ – a downturn after an initial boost from the Eat Out to Help Out scheme. 

‘You are looking at 40-50 per cent of normal revenues levels, or at 20-30 per cent of normal revenue levels in city centre sites,’ she added.

Rain Newton-Smith, chief economist at the CBI business group, was more positive about the Chancellor’s Winter Economy Plan, hailing Mr Sunak’s new jobs plan as a ‘lifeline’, but said sector-focused support could still be needed.

‘At this next phase of the crisis we did need to see an evolution of the support and the Jobs Support Scheme will help to save hundreds of thousands of jobs,’ she said.

‘But we may need to look at how that scheme is designed over the coming weeks if a crisis escalates. For some sectors and businesses, we might need additional support.’ 

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