Bank chief: Don’t fire staff
Plea to keep workers on amid fears a million hospitality jobs could go
THE new governor of the Bank of England has pleaded with firms not to fire staff amid warnings that more a million hospitality jobs are at risk.
Andrew Bailey urged companies to look at support being offered as part of the Government’s £350billion package before making any decisions. He advised struggling businesses to ‘stop, look at what’s available, come and talk to us or the Government before you make a big decision’.
Mr Bailey told the BBC: ‘This is a crisis we’re all in. It’s an emergency situation.’ There are growing fears that loans and grants included in the massive support package announced by Chancellor Rishi Sunak will not get to companies quickly enough.
Business group the CBI said more radical measures were needed to save struggling firms from collapse, including waiving a looming £35 billion VAT bill and temporarily scrapping employers’ National Insurance.
The appeal came amid warnings from leading trade figures that more than a million jobs were at risk with the possibility that thousands of pubs, bars and cafes could collapse by the weekend.
Airlines – which are hoping for a government bail-out – are preparing to put tens of thousands of staff on unpaid leave, while car manufacturers have shut down plants in the UK and across Europe.
UK Hospitality, which represents more than 700 companies including coffee shops, pubs, restaurants and hotels, said up to 250,000 jobs had already been lost in the sector since the coronavirus outbreak.
Chief executive Kate Nicholls has said a crisis can be averted only if the Government urgently injects funds which would help at least partly cover staff salaries.
The hospitality industry employs 3.2 million people and is the third largest private sector employer in the UK. The Government has said it is looking at other ways to support firms and employees hit by the Covid19 outbreak.
But Mrs Nicholls said the pandemic meant job cuts were ‘happening now, today and tomorrow – and are snowballing’.
‘Catastrophic number of losses’
Calling for an immediate support package, she said: ‘What was announced by the Chancellor will not stop job losses as companies will be very worried about taking loans to pay staff when they have zero income – for many, it just isn’t viable.’
Her comments were echoed by the British Beer and Pub Association, which represents 20,000 pubs. In an open letter to Mr Sunak, the body has urged the Government to underwrite 75 per cent of wages for all pub and brewing staff, estimating the cost at £1 billion.
Chief executive Emma McClarkin said: ‘Pubs are in a crisis. We need urgent intervention from the Government to prevent a catastrophic number of job losses. The Government has just 24 hours to create a pub-specific package to prevent irreversible closures and job losses.’
Simon Emeny, chief executive of pub chain Fuller’s, which has 400 premises across London and SouthEast England and 6,000 staff, said he feared hospitality workers will be left ‘on the street’.
He said 40 or 50 of his pubs could be closed by next week. ‘There are so many hospitality workers who stand to lose their jobs. They won’t be able to pay their rent and feed their families. It is breaking my heart.’
Tim Martin, founder of Wetherspoon, vowed to keep the pub chain’s 870 premises open.
But customers will be asked to sit at well-spaced, alternate tables – rather than standing at the bar. Businesses are worried that grants administered by local authorities and loans channelled through the British Business Bank will be mired in bureaucracy.
To speed up support for firms, the CBI urged ministers to use existing PAYE systems to ‘reverse’ national insurance paid by employers, and cancel or defer VAT, which is charged at 20 per cent on goods and services.
Firms, including pubs, restaurants and retailers, collect this tax from customers and then hand it over to
HMRC. The CBI said there are ‘some very large bills hitting businesses in the next few weeks’ including a VAT bill of £35 billion. Director-general Carolyn Fairburn said these bills should be ‘cancelled or deferred’.