Covid: Uncertainty as industries miss out on job support

Industries hit hard by the coronavirus pandemic are facing further uncertainty after missing out on help in the chancellor’s new emergency jobs scheme.

Hospitality, events and retail workers and businesses have expressed concern, as have those on zero-hours contracts.

Rishi Sunak said employees must be in “viable” jobs to benefit from the wage top-up scheme.

This means people working in industries currently closed – such as nightclubs – may lose out as there isn’t any work.

Mr Sunak said he hoped the new plan, announced on Thursday, would “benefit large numbers”, but warned the government “can’t save every job”.

Rival politicians called for more emphasis on training for workers losing their jobs.

Shadow Chancellor Anneliese Dodds told the BBC’s Today Programme: “We need a proper national training strategy so that when people become unemployed, they can hopefully be retrained with new skills and be able to access employment into the future.”

The Lib Dems’ Christine Jardine also criticised the lack of focus on training. She told BBC Breakfast said that the jobs plan was described as a “bridge for the economy” but “where will it take us?” She said people need to know that the government has a longer-term plan.

The Job Support Scheme will replace furlough and last for six months, starting in November.

Under the scheme, if bosses bring back workers part time, the government will help top up their wages to at least three-quarters of their full-time pay.

But only staff who can work at least a third of their normal hours will be eligible.

‘Worse’

Rob Paterson, chief executive of Best Western Hotels GB said the new wages scheme would “make the situation worse”.

“The hourly rate for people will increase by keeping them for 33% of the time and paying them 55% of their wages. We feel that pushes us closer to actually making mass redundancies at the end of October,” he told Today.

“We’ve already lost several hotels to this virus and there is now a very real risk we will lose many more,” he warned.

James Reed, chief executive of Reed Recruitment said the problem with the scheme “is that for employers it’s quite expensive”.

With so many employers under considerable pressure, I’m concerned that the scheme misses its objective which is obviously to keep as many people employed as possible.”

The plan to try to stop mass lay-offs was announced after the government introduced further measures to tackle a rise in coronavirus cases.

A new enforced early closing time is now in place for pubs, bars and restaurants in England, Scotland and Wales.

The latest daily data shows the UK has recorded 6,634 new coronavirus cases – the highest since mass testing began. Another 40 people have died within 28 days of testing positive for the virus.

‘Terrifying’

While many in affected industries welcome the government’s effort to save jobs and an extension of the cut in VAT, they say the increased virus restrictions will put the brakes on recovery and prevent them from earning enough money to stay afloat and take advantage of the government’s measures.

Lisa organises events in a hotel and has been furloughed, along with her partner. She was hoping she would go back to her part-time job in October, if companies started booking Christmas parties.

But she is worried the new 22:00 closing time for hospitality venues will scupper any Christmas business and is not sure her employer will bring her back under the new scheme.

“It is worrying for anyone who works in events. I’ve worked in hospitality since I was 16 – but now it is terrifying,” she told the BBC.

Lisa’s concerns are reflected throughout the hospitality and live-events industry.

“There’s simply no work to return to, with demand drying up in line with social distancing measures,” said Peter Heath, managing director of the Professional Lighting and Sound Association.

“As a result, the majority of businesses in our sector will not be able to generate sufficient revenue to support their contribution towards employees’ salaries, nor will they be able to contract the huge self-employed community the events industry has become so dependent upon.”

Nightclubs in particular feel aggrieved by the idea of help only going to businesses considered “viable”.

They have been closed since the end of March and say it is unfair they should be penalised because they have been obeying government regulations.

“The situation is simple – because we are closed, none of the Job Support Scheme extension is helpful to us,” said Peter Marks, boss of the Deltic group, which runs 53 nightclubs across the UK, employing 4,000 people.

“We have been forced into the place described as ‘unviable businesses’ only because the government have closed us.”

Almost all the group’s staff are still furloughed. He said they might need to look at making staff redundant.

• How will I be paid on the Job Support Scheme?
• Will the chancellor’s plan to save jobs work?

Mr Sunak has defended his decision to restrict the Job Support Scheme to employees working at least one-third of their normal hours.

He told MPs the government had to make sure it was targeting support to where it could make a difference, and to jobs which provided the prospect of long-term security.

But Michael Kill, who runs the Night Time Industries Association, has called for a rethink, saying: “To completely exile the entire night-time sector is simply unacceptable.”

How will the Job Support Scheme work?

• The government will subsidise the pay of employees who are working fewer than normal hours due to lower demand
• It will apply to staff who can work at least a third of their usual hours
• Employers will pay staff for the hours they work
• For the hours employees can’t work, the government and the employer will each cover one third of the lost pay
• The grant will be capped at £697.92 per month
• All small and medium-sized businesses will be eligible
• Larger business will be eligible if their turnover has fallen during the crisis
• It will be open to employers across the UK even if they have not used the furlough scheme
• It will run for six months starting in November

Theatres – where the vast majority of venues and productions remain closed – are also calling for targeted support..

Meanwhile, the boss of clothing firm Next has told the BBC hundreds of thousands of traditional retail jobs may not survive in the wake of the pandemic.

Lord Wolfson welcomed the jobs scheme but said thousands of jobs were now “unviable” because lockdown had triggered a permanent shift to online shopping.

‘Forgotten group’

Self-employed people will continue to receive support but the chancellor made no specific mention of those on zero-hours contracts.

Before the pandemic struck, Samantha Pearmain worked on reception and front-of-house duties in a busy conference centre near Cambridge.

She was on a zero-hours contract and was furloughed between March and the end of July.

The company she worked for paid her 80% of her wages in August as a goodwill gesture but now she has no income.

“I feel we’re the forgotten group of people,” she said. “I really want to know what the government is doing about people like me.”

The Treasury said employers could decide to change their zero-hours workers’ contracts to make them eligible for the scheme.

Samantha is looking for work, but is worried there will be an “explosion in unemployment”. The new scheme is designed to prevent that happening when the furlough scheme finishes at the end of October.

The City and Guilds Group, which helps people acquire the skills to develop their careers, said the chancellor’s measures were only a small part of the employment puzzle and a long-term solution was required.

Unless people were helped to retrain, Kirstie Donnelly, the City and Guilds chief executive said, “We run the risk of a whole generation of people being permanently left behind.”

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