Pubs, bars and restaurants will see “far higher” than half a million job losses by the end 2020, industry chiefs have warned MPs.
The boss of trade body UKHospitality told MPs at a Treasury Select Committee that a combination of the 10pm curfew, local lockdown restrictions and downturn in customer confidence has hit hospitality firms in recent weeks.
Kate Nicholls, chief executive of the industry group, said that 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 much more severe.
“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.
Ms Nicholls also sounded the alarm that redundancies are also expected to spike at the end of the month, when the current furlough scheme ends.
The programme will be replaced by a less generous Jobs Support Scheme, which will see the Government pay up to 22% of wages for workers who come back part-time from November 1.
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.
What has the 10pm curfew done to the hospitality sector?@UKHospKate told us the curfew, working from home, no events in the run up to Christmas and table ordering have contributed to pub and restaurant sales being down 30-50% year on year. pic.twitter.com/kDGNpRW94b
— Treasury Committee (@CommonsTreasury) October 6, 2020
“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.”
Ms Nicholls told MPs that sector operators said recent restrictions have “moved them back to the trading levels they saw at the start of July”, regressing after the boost from Eat Out to Help Out.
“You are looking at 40-50% of normal revenues levels, or at 20-30% of normal revenue levels in city centre sites,” she added.
Rain Newton-Smith, chief economist at the CBI, was more positive about the Chancellor’s Winter Economy Plan, hailing his 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.”