900,000 hospitality jobs at threat unless further employment support is offered, warns UKHospitality

Yesterday, UKHospitality chief Kate Nicholls warned House of Lords Economic Affairs Committee that at least 900,000 jobs could be lost should the government bring the furlough scheme to an abrupt end.

Calling for sector-specific employment support, she thanked the chancellor for his Plan for Jobs, as it has allowed many businesses to retain employees, but said that the hospitality sector was facing huge uncertainty in demand, and were grappling with concerns over trade in the months leading up to Christmas.

Despite positive growth of the economy recorded last month and the ongoing furlough scheme supporting businesses to keep their staff in jobs, the  UK unemployment rate has risen to its highest level for two years, and fears that this is the sign of worse to come are being felt throughout the industry. 

Almost 100,000 jobs were lost in hospitality over three months, and more are likely to ensue unless support is provided for part-time workers and businesses affected by local lockdowns.

Additionally, the trade body is urging government to provide enhanced support for hospitality businesses that aren't able to operate at their normal capacity or rate, to cover 50% of wages if the remainder is paid by the employer.

It proposes that a bespoke financial support package is made available for legally closed businesses.

Proud that the sector is the third biggest employer in the country, Kate Nicholls told the House : "As a sector we provide fantastic employment opportunities for everyone – including offering young people their first taste of the world of work.

"It is undeniable this crisis has massively damaged our ability to employ. Parts of the sector remain closed; a whole range of activities are not permitted; and the rest remains substantially below capacity. As a sector we have utilised flexible furlough to get as many people as possible back into the world of work, but we are at a very delicate stage.

"Redundancies have risen, driven by company voluntary arrangements caused by landlords demanding rent payments. Of those staff that remain around half are back at work. A further 16% are on flexible furlough. Just over a third of the sector remains on full furlough.

"We are concerned this leaves at least 900,000 people in our sector at risk of redundancy without further support. The hospitality sector has a proven track record in delivering jobs growth. But we need government to be flexible in its approach and to provide the necessary support over the bleak winter months in order for our sector to continue to play a role in the economic recovery.”

The news comes after new social distancing guidelines came into force, threatening customer confidence at a time when footfall is already forcibly reduced, and with uncertain times ahead in the months leading up to Christmas.