Record redundancies as support for hospitality urged

The UK’s unemployment rate rose to 4.8%, its highest level since November 2016, according to the Office for National Statistics (ONS).

A record 314,000 redundancies were recorded in the three months to September while the total number of people officially classed as unemployed rose by 243,000 to 1.62m in the period, marking the biggest increase since 2009.

Some employers slashed workforces ahead of the original end date of the furlough scheme at the end of October. The scheme was extended until next spring by the Chancellor in a policy shift from his initial winter economy plan.​

Blow for hospitality

October figures suggested the number of employees on UK payrolls has fallen by 782,000 since March, the start of coronavirus restrictions in the country.

Hospitality has been hit particularly hard, with data from ONS stating that sectors defined as "accommodation and food service activities" had the highest redundancy rate, ahead of the construction sector.

What's more, UKHospitality (UKH) estimates at least 600,000 workers in the hospitality sector - including seasonal workers whose positions were not refilled - lost their jobs this year.

Our estimate is that the actual total is 660,000 taking account of seasonal workers not stood up and positions not being refilled. https://t.co/KVbO0D84Ka

— Kate Nicholls (@UKHospKate) November 9, 2020

UKH said the figures were further evidence that the Government needs to do more to help struggling operators in the sector.

UKH chief exuective Kate Nicholls said: “The figures released by the ONS today underline the dreadful hit that hospitality has taken during this crisis and reinforces the urgent need for targeted support.

Incredibly difficult

“Our sector has seen the highest fall in jobs of any," Nicholls continued. "We are entering another period that is likely to be incredibly difficult for us. Businesses are in lockdown once again and when they do reopen, it will be back into a severely restrictive environment.

“Extension of the furlough scheme will provide some protection but scrapping the Job Retention Bonus Scheme is a major blow at a time when things could not be tighter – dramatically impacting on cashflow and potentially making businesses technically insolvent." 

Chancellor Sunak said the retention bonus would be revisited when the time was right but given the furlough extension until spring the policy set for January “obviously falls away”.

New approach

“Furlough will still mean that employers must pick up the cost of National Insurance Contributions (NICs), while receiving no revenue,” Nicholls added. “The majority of businesses are operating at a loss, with little to no financial reserves and the prospect of a bleak winter ahead.”

The sector has been calling on the Government to review measures such as the 10pm curfew during England’s four-week lockdown.

Nicholls called for a “new approach” from 3 December, when pubs would be able to reopen if English lockdown laws expire on their set date of 2 December.