Wednesday 23 September 2020 10:46 am

Luke Johnson: 1m employees on furlough face redundancy

Former Pizza Express boss Luke Johnson has warned that at least a million jobs could be lost in the hospitality industry as the government tightens restrictions. 

Speaking to BBC Newsnight, the restaurant mogul predicted that if the government cut all subsidies, “of the 3m [on furlough] at least a million, maybe more, will be made redundant”. 

Read more: Night-time businesses slam 10pm curfew as ‘devastating’

This week the government announced new restrictions on the hospitality industry, including a 10pm curfew, amid mounting concerns of a second wave of infections. 

The industry said it was a “heartbreaking” decision for a sector already struggling with fragile public confidence and reduced capacity due to social distancing guidelines. 

Leading business groups and industry bodies have called on further government measures, including an extension of the furlough scheme, to help pubs and restaurants weather the storm. 

The end of the government’s job retention scheme, on 31 October, is expected to be a cliff edge for many businesses who have relied on the scheme through the crisis.

Luke Johnson warned that many jobs are at risk within the sector “if lockdowns in some form or fashion continue and if restrictions remain in place”. 

“The companies will be feeling very demoralised and not confident about investing and rebuilding… [they will possibly be] insolvent so they close down all together”, he added. 

There were further signs this week that the UK is heading into a second lockdown as coronavirus cases rose to their highest level since May. 

In a televised address to the nation on Tuesday, the Prime Minister said the country must follow the new restrictions or risk another lockdown. 

“I fear that lockdowns have been devastating for the economy and the longer-term consequences”, the former Patisserie Valerie boss told the BBC. “The costs of the debt that we owe and the jobs lost and the businesses shut and the general damage to investor confidence will take its toll over a longer period.” 

But there are signs that the government will support struggling sectors through this period.

Read more: Business groups call for further support as UK tightens restrictions

The Guardian and the Financial Times both reported today that Chancellor Rishi Sunak is considering German-style subsidies to replace the furlough scheme, as part of a wider emergency package.

Sunak is reported to have delayed an announcement today, which would have extended the existing loan guarantee schemes, to draw up a wider package following the restrictions announced yesterday.