Covid calls time on thou­sands of jobs

◆ Pubs and restau­rants pre­pare mass lay-offs de­spite Su­nak’s new scheme

The Daily Telegraph - Business - - Front Page - By Han­nah Ut­t­ley and Tom Rees

◆ Chan­cel­lor’s lat­est stim­u­lus can­not off­set Govern­ment’s heavy re­stric­tions

◆ Hos­pi­tal­ity faces wipe­out in some city cen­tres as cus­tomers stay at home

THE rav­aged hos­pi­tal­ity in­dus­try faces thou­sands of job losses and a mas­sive wave of clo­sures af­ter bosses warned that Rishi Su­nak’s lat­est res­cue scheme will not stop them lay­ing off staff.

Pub and res­tau­rant chiefs said they have no op­tion but to go ahead with mass re­dun­dan­cies in the face of dra­co­nian mea­sures to con­trol coro­n­avirus, de­spite the Chan­cel­lor’s new wage sub­sidy for part-time work­ers.

Mr Su­nak’s sup­port scheme is ex­pected to pay out £5bn over six months by top­ping up the wages of work­ers whose hours have been cut – but it is feared oner­ous con­di­tions could put many ma­jor em­ploy­ers off.

Pa­trick Dardis, chief ex­ec­u­tive of pub chain Young’s, said: “It won’t stop busi­nesses and us from lay­ing off staff.

“Our plan be­fore to­day’s an­nounce­ment will not al­ter as a con­se­quence of what was said. From Novem­ber, we will only em­ploy and pay staff that are work­ing in our pubs on the hours that are needed.”

Si­mon Emeny, boss of ri­val Fuller’s, said: “The an­nounce­ment on Tues­day, par­tic­u­larly pre­vent­ing peo­ple from go­ing back to the of­fices, will make it very hard for us to keep pubs open and pro­tect jobs in cen­tral Lon­don.

“Rishi Su­nak has been given a hos­pi­tal pass by the Prime Min­is­ter. In or­der to pro­tect jobs un­der the cir­cum­stances the Prime Min­is­ter has cre­ated, we needed an ex­ten­sion of the fur­lough scheme for the six months these re­stric­tions will be in place for.”

Hos­pi­tal­ity firms are ex­pected to bear the brunt of the dam­age from the lat­est coro­n­avirus crack­down, with of­fice work­ers told to stay at home where pos­si­ble and pubs and restau­rants forced to shut at 10pm.

Bosses said they will now be forced to lay off work­ers and shut sites to sur­vive be­cause the new sup­port does not go far enough. A mass of venues in ma­jor cities could close for­ever, with cen­tral Lon­don hit hard­est.

About 1m of the in­dus­try’s 3.2m work­ers are be­ing paid through the Govern­ment’s fur­lough scheme, which ends next month.

Will Wright, head of re­gional re­struc­tur­ing at KPMG, said: “The sense of fore­bod­ing in the ca­sual din­ing in­dus­try over the last 48 hours is pal­pa­ble.”

Mr Su­nak’s new scheme will pay at least 77pc of em­ploy­ees’ salary over the next six months if they work at least a third of their usual hours, with the Govern­ment and em­ploy­ers top­ping up two thirds of the lost pay from hours that are not worked.

The sub­sidy will be made avail­able for all small and medium-sized busi­nesses, but larger firms will need to prove that turnover has fallen by a third dur­ing the pan­demic to qual­ify.

Mr Su­nak said he also ex­pected that large firms en­rolled in the scheme will be pre­vented from pay­ing div­i­dends or from mak­ing work­ers re­dun­dant.

Tim Martin, chair­man of JD Wether­spoon, said the cur­few will re­duce sales of “hard-pressed” pubs and restau­rants who would be forced to cut jobs as a re­sult. He said: “The main is­sue is that govern­ment ap­pears to have no strat­egy and is mak­ing mi­cro moves and clar­i­fi­ca­tions al­most on a daily ba­sis.

“The UK needs to be like the Queen Mary on an At­lantic cross­ing – just an oc­ca­sional nudge on the tiller. In­stead, we’re zig-zag­ging wildly which is eco­nom­i­cally very in­ef­fi­cient.”

Kate Ni­cholls, chief ex­ec­u­tive of UK-Hos­pi­tal­ity, said: “This is a stay of ex­e­cu­tion but it’s not enough to save jobs.” Ralph Findlay, chief ex­ec­u­tive of Marston’s, said: “It is un­likely to make a dif­fer­ence to the plans of busi­nesses. They will want fewer peo­ple work­ing longer hours rather than more peo­ple work­ing fewer hours.”

Jonathan Gel­dart, head of the In­sti­tute of Di­rec­tors, added that there are still gaps in the Chan­cel­lor’s sup­port for many parts of the econ­omy, in­clud­ing many self-em­ployed and small com­pany di­rec­tors.

He said: “With in­vest­ment in the dol­drums, the Trea­sury must act to pro­vide re­liefs for firms to spend on dig­i­tal tech­nol­ogy and skills, par­tic­u­larly as SMEs look to adapt to home work­ing.

“The Govern­ment should also re­main open to widen­ing ac­cess to its loan schemes, and en­sur­ing lo­cal au­thor­i­ties have the fund­ing to pro­vide grant sup­port to firms that have been shut out of other chan­nels.”

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