Hospitality worst-hit as unemployment rises again

By Daniel Thomas
BBC News

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Image source, Getty Images

There were 819,000 fewer workers on UK company payrolls in November than at the start of the pandemic, official figures show.

Hospitality was the worst hit sector, accounting for a third of the job losses, followed by retail, according to the Office for National Statistics.

The unemployment rate rose to 4.9% in the three months to October, with the jobless total up to 1.7 million people.

Redundancies hit a record high over the period.

Why has hospitality suffered so much?

While there have been significant job losses in other sectors such as aviation and manufacturing, hospitality has been the most affected by coronavirus restrictions this year.

Bars and restaurants had to close for months during the first lockdown, and have faced strict compliance rules and further shutdowns since then.

Thousands remain closed in areas covered by tier 3 restrictions and the industry will suffer even more when London - a hive of hospitality firms - enters the highest alert level on Wednesday.

"It you look at the number of people losing their jobs, the number of people on furlough and the vacancies available for people looking for jobs in the hospitality sector, all that adds up to a very difficult time for that industry," the ONS's director of economic statistics, Darren Morgan, told the BBC's Today programme.

Industry body UK Hospitality called the move to place London and parts of Essex and Hertfordshire into tier 3 "illogical", despite the recent surge in infections.

"The spread is being predominantly driven through schools... yet, once again, it is hospitality that will take the hit," said boss Kate Nicholls.

"So many pubs, restaurants, bars, cafes and hotels, having invested so much to make their venues safe, are only just clinging on by the skin of their teeth."

How are jobseekers coping?

Image caption,
Ana Grillo is looking for work in marketing and publishing

Ana Grillo graduated in September but has been unable to find work since, despite having made applying for roles her "full time job".

"It's extremely overwhelming, especially in a pandemic as there's not as many people to turn to for support," she told the BBC.

She is looking for work in marketing or publishing but says the competition is intense - so much so she tries to submit applications within an hour of an advert being published.

"Some employers make us very aware that they are overwhelmed so they are just going to take the first bunch," she said.

Having largely supported herself through university, living back at home with her parents has made her feel a "bit of burden".

"I've been independent for three years and now I feel completely helpless. But I have no choice."

Will things get worse?

Redundancies hit a record 370,000 in the three months to October, according to the ONS, although this began to ease towards the end of the period.

But the figures pre-date the November lockdown and unemployment is excepted to continue to rise, peaking at a rate of 9.7% this year, according to the Office for Budgetary Responsibility (OBR), the government's independent forecaster.

Suren Thiru, head of economics at the British Chambers of Commerce, said: "The latest data confirms that coronavirus continues to weigh heavily on the UK labour market.

"While the furlough scheme will help safeguard many jobs over the winter months, with businesses facing the prospect of further restrictions and a messy end to the Brexit transition period, major job losses remain probable in the near term."

Will the furlough scheme help?

The jobs numbers are again grim over the course of the pandemic with 819,000 fewer employees on payrolls since February. But without extension of the furlough scheme to March they would have been even more concerning.

The official headline unemployment rate is up only a little at 4.9%. But for most of October it was above 5%.

These numbers reflect mainly the period before the second national lockdown. And for the first time they are broken down by industry. Well over half of the lost employees during the pandemic have been in hospitality and retail, 456,837 out of 819,000. Health and social care have seen an extra 74,342 jobs.

While some optimism has emerged from the prospect of a functioning vaccine, the next few months are likely to remain very challenging, with unemployment continuing to rise. Those rises continue to be contained by the furlough scheme.

What do politicians say?

Many companies began to cut jobs in anticipation of the end of the furlough wage support scheme, which was originally meant to finish on 31 October.

Chancellor Rishi Sunak extended the scheme until March as the second England lockdown began last month, but some argue he should have moved sooner.

Commenting on the latest figures, Mr Sunak said the government had provided £280bn of support, including protecting more than nine million jobs through the furlough scheme and offering loans, grants and tax cuts to business.

He added: "But we know that, sadly, many people are already facing unemployment. That's why our Plan for Jobs is also helping to create new jobs, including through our £2bn Kickstart scheme and expanded apprenticeships and traineeships."

But Labour's shadow chancellor, Anneliese Dodds, said the chancellor's "irresponsible decisions" had cost jobs and left the UK with the "worst recession of any major economy".

"It's no coincidence that redundancies rocketed to record levels when the clock was ticking down to the chancellor's furlough cliff edge and rising employer contributions were putting businesses under pressure.

"Employers can't afford to wait until the last minute again for this chancellor to decide what happens to the furlough scheme at the end of January. They need clarity now."

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