Jobs at risk as furlough ‘lifeline to nowhere’

By Emily Hawkins

- Last updated on GMT

Lifeline to nowhere: operators have said they are concerned they will not have cash flow for wages in the coming months
Lifeline to nowhere: operators have said they are concerned they will not have cash flow for wages in the coming months

Related tags Coronavirus

Mass redundancies are on the horizon if there is no further help for the sector beyond the furlough scheme, industry voices have warned.

Support packages are needed for businesses left out by initial grant schemes, which are struggling to envision a stable future, a coalition of industry representatives have warned.

It comes as shadow business secretary Ed Miliband called on the Government to deliver sector-specific support for those severely impacted by the coronavirus crisis.

Pub operators have said they are worried they will not be able to pay staff wages in the coming months, particularly when the Government’s furlough scheme ends in October. 

Elephant in the room

Andrew Taylor operates the Mr Fox pub in Croydon, south London, and said ministers should provide the same level of financial support to employers that employees have received.

He added: “With more than 13 of my staff on furlough and the cost of reopening my pub in excess of £8,000 with not a penny made over the past 10 weeks, I struggle to understand how the Government doesn’t see my lack of cash flow as a problem that needs solving. 

“No one wants to make redundancies and no one wants to create another financial pressure, but it seems like the elephant in the room is we have millions of people unemployed who are being given a lifeline to nowhere.”

Greater London night czar Amy Lamé also echoed trade bodies’ calls for a continuation of support for the hospitality and late-night industries.

Bleak future

Lamé said: “While we welcome the Government extension of the job retention scheme, this crisis will require long-term economic intervention from the Government. Bars, pubs and clubs remain in lockdown without the levels of cash flow they need to pay wages, national insurance and pension contributions with their future looking bleak to impossible. 

“Without more help from the Government, they will be forced into widespread redundancies, which would have a further negative impact on our economy, culture and society.”

The Government said it was taking unprecedented action at speed to support businesses and retain jobs.  

A Government spokesperson added: “This includes 100% Government-backed loans worth up to £50,000, paying 80% of furloughed workers’ wages, tax deferrals, eviction protection and 100% business rates relief, which will save thousands of firms in England £11bn this financial year.

“The Government continues to review the economic situation and consider what support businesses and other organisations need.”

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