U.K. Hospitality Industry Warns 500,000 Jobs Are at Risk

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The U.K. hospitality industry warned it may lose 500,000 jobs when the government’s furlough program to support wages ends.

Hotels, restaurants and bars are saddled with back taxes of 93 million ($132 million) that will become an unsustainable burden if the government fails to drop all lockdown rules as planned on June 21, said Kate Nicholls of business lobby group UK Hospitality.

The remarks made during a hearing in Parliament underscore the scale of the strain placed on businesses by Covid-19 rules that closed vast sections of the economy for more than a year. With the Delta variant of the virus first detected in India now spreading fast in the U.K., the government has raised doubts over when it can allow a full reopening.

“All it takes is one landlord to be recalcitrant and to not concede or not negotiate and it could be enough to trigger insolvency across the whole of the estate,” Nicholls said in a hearing at the Treasury Committee in the House of Commons on Monday.

Nicholls said the industry is suffering labor shortages that will worsen even if the full reopening happens on time. That’s partly because workers from the European Union left Britain for their home countries during the crisis and face difficulties returning due to post-Brexit visa rules. It’s also because many migrant workers cannot return to the U.K. because of travel restrictions, and as students have moved out of towns and cities.

She suggested an emergency coronavirus recovery visa, as introduced in Australia, could help to attract migrant workers back to Britain. Many businesses couldn’t afford to furlough seasonal staff, meaning they are competing for recruits. For skilled chefs and managers, in some parts of the country, this is leading to wage inflation, she said.

She added:

  • Government loan programs are helpful, but commercial landlords remain wary of renting to hospitality firms because of the risk that lockdown rules tighten
  • Many hospitality companies are operating at a loss currently because of the cost of delivering table service as required under government rules
  • The industry owes landlords 3.6 billion pounds, that will leave an impact like “long Covid for the economy.”

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