PUB and restaurant bosses are demanding Chancellor Rishi Sunak ends furlough – to combat a spiralling recruitment crisis.
They are so short-staffed, some have been offering £1,000 joining-up bonuses to coax back uncertain workers.
David Wilson says many workers in the hospitality industry have no desire to come backCredit: Andy Kelvin / Kelvin Media
They blame the £63billion government pay scheme, as would-be recruits prefer to stay home and take state cash.
The Sun on Sunday can reveal UK-wide there are 700,000 job vacancies, including 188,000 in hospitality alone where more than 250,000 remain on furlough.
The scheme does not stop until the end of September, amid uncertainty over the economy.
But experts fear some have now lost the will to work. Professor Len Shackleton, from the Institute of Economic Affairs, said: “Furlough has been a great success but has gone on for far too long.
“We should wind it up and get back to reality. We should not be holding back new businesses which need workers in a vain attempt to keep old businesses alive.”
Furlough began in March last year to stop firms laying off staff, or collapsing, during lockdown.
David Wilson says he has advertised for roles and had no successCredit: Andy Kelvin / Kelvin Media
Some 11.5million workers have been furloughed, with 4.2million still on the handout at the end of March this year. It has helped keep unemployment at around five per cent.
A Treasury spokesman said: “Furlough means two million fewer people will have lost their jobs.
“We went long with furlough to avoid a cliff edge and ensure as many jobs as possible are protected.”
But it is down to employers to stop the payouts, by ceasing to apply for the state to pay 80 per cent of a worker’s wages.
Meanwhile, trade body UK Hospitality says 15 per cent of its workers, or around 270,000, are reluctant to come off furlough, over fears of another lockdown.
Jamie Rogers is offering £1,000 incentives to try and attract new staffCredit: Apex
UK Hospitality’s chief executive Kate Nicholls said: “Furlough is still essential, helping to make sure jobs are protected over the summer.
“But it could be tightened up to ensure it is not masking problems in our economy and protecting jobs that are no longer there.
“Lots of people are trying to recruit and in some parts of the country there are vacancies that they cannot fill.”
How the furlough scheme works
THE Coronavirus Job Retention Scheme, also known as furlough, began in March 2020 and is due to end at the end of September this year.
The scheme provides grants that cover 80 per cent of an employee’s wages up to a maximum of £2,500 per month.
To apply, employers have only to agree in writing that the worker has been furloughed, and they can furlough staff for any amount of time and any work pattern, while still being able to claim the grant for the hours not worked.
Employees cannot continue working for the company during the time they are furloughed but are free to undertake training or even second jobs.
The scheme does, however, cover only employees recruited on or before March 2 this year, and from July 1 the grant will be reduced each month.
The scheme is not cost-free because employers still have to cover national insurance and pension outlays.
Small business owner Jamie Rogers is now so desperate, he is offering a £1,000 bonus to anyone who will work for him until September.
His Twenty Seven by Jamie Rogers restaurant in Kingsbridge, Devon, is losing thousands of pounds a day because he is short of chefs, bartenders and waiters.
Jamie, 30, said: “Right now I only have 15 staff and need 20 to be fully operational. We are turning away bookings every day.
“It’s impossible to find good staff and restaurants are offering double wages to bring people in.
“I call on the Chancellor to end furlough now because enough is enough and we are going to be facing a huge problem by winter.”
Jamie Rogers says he needs five more staff or he will keep having to turn away bookingsCredit: Apex
Employers say one clear fault is that they cannot apply for furlough for new staff they have taken on after March 2 this year, even if they are forced back into lockdown.
So workers are turning down job offers as they are nervous about losing the possible future benefit.
A second issue is that people on furlough are allowed to take a second job, and maybe double their income, so have little interest in their old employment restarting.
There are similar stories across Europe, too, as lack of staff hampers the reopening of hotels, restaurants and bars. Some owners are raining money to attract workers, creating inflationary pressures.
Rishi Sunak has been urged to end the furlough schemeCredit: AFP
In the US and Israel, high unemployment benefits have been blamed for people staying away from work.
Back in the UK, Hugh Osmond, founder of restaurant group Various Eateries, with around a dozen locations across the country, has even heard stories of workers claiming furlough in the UK despite starting new jobs overseas in countries such as Italy and France.
Hugh, 59, said: “Furlough has been a godsend for the hospitality industry but now we want people back to work and it’s causing chaos.
“It’s a perfect storm because furlough is giving people many reasons not to return to work or find a new job. It’s time to end furlough, 100 per cent.”
The system is also rife with abuse and HMRC is investigating more than 21,000 cases of alleged furlough fraud, with firms claiming for people they no longer have on the books.
David Wilson fears many overseas workers cannot or will not return to the UKCredit: Andy Kelvin / Kelvin Media
David Wilson, 56, has run his Calypso restaurant in Blackburn for ten years and has now got into a staffing crisis.
The dad of two had to furlough five workers and although he has taken them back, he is still short-staffed.
He said: “We’ve advertised but haven’t had any joy and it’s a real worry. There are lots of people who have worked in hospitality for years but have no interest in coming back.
“Hospitality relies heavily on workers from overseas but during the pandemic many have flown home and sadly aren’t returning.”
Tory MP David Jones last night said: “Furlough has been a huge success, keeping business ticking over and maint-aining jobs for individuals.
Furlough has saved businesses but leaders say it needs to end
“But this seems to be having some unintended consequences, which I am fully aware of from speaking to business, particularly the hospitality industry.
“Many workers have been using the past 15 months, while on furlough, to retrain and learn new skills. There are now fears these people will leave their jobs in hospitality and find another industry for employment.”
Greg Mulholland, director of the Campaign for Pubs, said: “The reality of furlough for pubs, especially those run by independent publicans, is that it has and is keeping pub staff in jobs, which is important.
“But it is not helping the pub as a business — indeed furlough is yet another cost on top of the other ongoing ones of rent, mortgage and bills.
“The issue for pubs and hospitality at the moment is the acute shortage of staff.
“Many are struggling to recruit, which will have an impact on pubs — including over bank holiday weekend.”
The curse of free money
By Douglas Murray
DO you still feel like going into work?
Plenty of people have got used to life at home and we are about to find out whether the last year has changed our idea of what a working day should actually be.
In the US, some in charge are starting to get worried about this. In the last year Americans got a set of stimulus cheques from the government.
Free money, basically, to keep the economy going. But it seems a lot of Americans are very keen to stay working from home.
In a story that is cropping up across the land, bosses in the US claim they can’t get people to fill the jobs they have vacant.
One employer in Dallas said this week that despite offering wages of up to $30 (£21) an hour, he can’t find anyone willing to turn up to work.
The average weekly unemployment benefit is now well over $600 (£420), with some states paying $700 (£490). The average weekly minimum wage is roughly $450 (£317).
The question now is will it be the same story here in Britain? As the economy starts to reopen, we are about to find out.
Chancellor Rishi Sunak has kept extending his generous furlough scheme.
It has worked brilliantly and meant that a lot of people who might have lost their jobs have been able to keep them.
That scheme is thought to have helped around 11million people. In March it was again extended — to October this year.
That means many people will have spent 18 months with most of their salary paid by the Government.
But is the deal they’ve had going to prove, like in America, to have been a bit too generous? Has furlough left people with less incentive to seek work?
Most of those on the scheme have spent the last year and more being paid 80 per cent of their usual salary.
That 20 per cent sounds like a big cut until you take out a number of things.
Nobody on the scheme has had to pay their commuting bills, car or public transport costs.
They’ve been able to get all their meals more cheaply at home, and many other outgoings (not least the ones from going out) have gone.
From the beginning of the Sunak scheme there were people who worried that the 80 per cent figure was too high.
Will people want to go back to work? Some will, of course. But many will find normal working life a drudgery after this.
Fighting through the traffic, spending less time with the family, seeing colleagues you don’t much care for.
For many people this and much more means working life might not look so good.
You can understand why some on furlough look to October with dread.
So this country, like America, is going to have a big test in front of it.
We need our economy not just to sluggishly grind into gear but to roar back into gear.
For this country to pull through we have to positively roar back, not sidle back.
Will we be able to do it? You’d hope so. There are benefits to everyone when people work hard for their earnings.
But a little bit of me worries that this country might have lost its work ethic.
And that we’re going to need a rude awakening to get us back into gear.