Coronavirus has already had a devastating impact on British workers in just one week, including more than a dozen hotel staff who were sacked and made homeless after being made redundant with no warning.
Official advice to avoid pubs, clubs and theatres was issued on Monday before escalating into demands for Britons to avoid all non-essential contact with other people, leading to many businesses reeling from a collapse in demand.
Staff at the Coylumbridge Hotel in the Scottish Highlands received a letter on March 19 to say its owners were ‘taking the latest government advice’ and that their employment had been terminated.
There have been lay-offs in restaurants, pubs and cafes amounting to up to 80% of the total payroll as well as in other badly-affected sectors like the travel industry, with both easyJet and Virgin Atlantic ordering employees to take unpaid leave.
As the number of confirmed cases in the UK surged by 2,000 in a week, Chancellor Rishi Sunak was today poised to unveil a new multi-billion pound bailout to halt more layoffs, including possibly underwriting £17,000 of the salary for each worker.
Staff at the Coylumbridge Hotel in the Scottish Highlands received a letter on March 19 to say its owners were ‘taking the latest government advice’ and that their employment had been terminated
The hotel was branded ‘heartless’ for how it handled the redundancies, but other business owners have spoken of their devastation at having to let their valued staff go, including the Santo Remedio Mexican restaurant in London
Staff at the Coylumbridge Hotel near Aviemore heard they would lose their jobs yesterday, with more than a dozen of them who live at the complex ordered to leave ‘immediately’.
Alvarito Garcia from Madrid, who has worked at the hotel for nearly two years, said his best option now was to live in his tent until his food ran out because he did not know if he could return to Spain due to travel restrictions.
‘I don’t know what to do,’ he told BBC radio’s Good Morning Scotland. ‘They gave me the letter and they said I had to leave immediately. They didn’t give me any notice. Even in my rota, they didn’t put anything different.’
The hotel was branded ‘heartless’ for how it handled the redundancies, but other business owners have spoken of their devastation at having to let their valued staff go.
Addie Pinkster, founder and chief executive of Adelpha, a corporate finance company in London, said she had been reluctantly forced to lay-off 20% of her teams.
Others have been asked to take a 25% pay cut in order to keep the business sustainable and as many people employed as possible.
‘The staff and the teams are responding really well to that,’ she told BBC Radio 4. ‘On the one hand a lot of people need that extra day off now anyway because they’ve got childcare and other situations going on and secondly, actually people’s living costs have gone down.’
Chancellor Rishi Sunak at 10 Downing Street in London yesterday as he plans a multi-billion pound package to help firms keep workers on their payrolls
The aviation industry has also been badly hit, with EasyJet begging its pilots and cabin crew to take three months of unpaid leave and said 3,000 faced losing their jobs
Coronavirus bailout: What has government already announced?
Chancellor Rishi Sunak is set to unveil more measures to prop up the economy later.
The plans announced up to now include:
- A £30billion fiscal stimulus in the Budget last week, including £12billion directly for the fight against coronavirus, with more money for NHS;
- Government-backed loan guarantees worth £330billion – equivalent to 15 per cent of GDP. The Treasury will increase this with ‘as much capacity as required’
- A £20billion package for business including a 12-month rate holiday for all firms in retail, leisure and hospitality sectors, and cash grants of up to £25,000 for smaller companies;
- A three-month mortgage holiday for homeowners;
- A three-month ban on evictions of renters, and mortgage holiday extended to buy-to-let;
- The Bank of England has cut rates twice to a record low of 0.1 per cent. Its quantitative easing scheme – effectively printing money to stimulate the economy – has been expanded to more than £600billion;
Natalie Diaz-Fuentes, owner of the Santo Remedio Mexican restaurant in London, also said she had been forced into difficult conversations with her staff.
‘On Tuesday I had to sit down 20 members of staff – more than 80 per cent of my team – and tell them that we just had no way to give them any work, we put them on a temporary lay-off,’ she said.
‘We are seeing what we can do to keep paying our managers, our core team, as long as possible but like basically every other restaurant we literally don’t know how we will survive this without substantial government intervention.
‘How will we pay the rent? How are we going to pay the staff? How are we going to pay the suppliers? If we don’t have people coming through the doors, the cash runs out very very quickly.’
Meanwhile, other businesses said they were managing to adapt in a bid to maintain their workforce.
David Lister, owner of E’Lupo’s restaurant in Rotherham, said: ‘What we’ve done to try and combat the large number of cancellations that we’ve had is either offer the people that are cancelling their tables to deliver their meals to them at home or to roll over their bookings to a later date.’
Gym owner Michael Owen said he had closed his premises but shifted to hosting classes online.
The aviation industry has been particularly badly hit by a dip in demand caused by countries shutting down their borders to slow the spread of the virus, affecting thousands of employees.
EasyJet this week begged its pilots and cabin crew to take three months of unpaid leave and said 3,000 faced losing their jobs.
Virgin Atlantic is asking crews to accept eight weeks of unpaid leave over the next four months while British Airways has warned of job cuts amid a ‘fight for survival’.
The High Street has also taken a battering, with retail giants including Ikea and Selfridges forced to close stores amid the worsening pandemic.
We can’t afford a loan so 40 drivers are going
Amber Cox is the manager of Dans Luxury Travel, Essex
A family-run coach firm has been forced to lay off all 40 drivers, and is days from going bust without an urgent Government cash injection.
Dans Luxury Travel, based in Waltham Abbey, Essex, was established almost 50 years ago.
The firm’s drivers regularly transport schoolchildren as well as running coach trips to the likes of Glastonbury Festival and the Chelsea Flower Show.
But the effect of the outbreak on schools and social gatherings has seen all of their bookings cancelled.
Manager Amber Cox, 28, said: ‘Without urgent money we will go bust within days. There has been a feeling of absolute devastation over the last three or four days.
‘We have had absolutely no choice but to let off all of our drivers. When I heard the Chancellor was making an announcement I thought we would be saved but now we’re days away from pulling the plug. The business rates relief doesn’t apply to us and the loans are going to take too long to come through. Plus, we won’t be in a position to repay large loans if we haven’t made money all summer. We need money now. Today.’
Miss Cox said some form of Government-backed salary cover or universal income would allow the company to keep hold of some staff and then take on new bookings in the autumn.
She added that, fortunately, some drivers have been taken on by a nearby lorry firm which is running supermarket deliveries.
Dans Luxury Travel was founded by Dan Brown, 70, in 1974, with one minibus.
It has transported the Liverpool football team as well as offering coach holidays for the elderly across the UK and Europe.
Designer chains Michael Kors, Reiss and Abercrombie & Fitch also shut up shop as UK deaths from the virus hit 144 and known cases shot up to 3,269.
Swedish furniture chain Ikea will temporarily put up the shutters in all its 22 stores in Britain from 6pm to try to stop the lethal bug spreading.
To avert mass redundancies, Chancellor Rishi Sunak could underwrite around £17,000 of every worker’s salary in huge new coronavirus bailout today.
The massive rescue package is set to be unveiled by Mr Sunak and Boris Johnson after furious complaints that they were not doing enough for ordinary people.
There have been warnings that GDP could be slashed by a fifth and a million could lose their jobs within months – with many more to follow – after ‘social distancing’ measures brought the economy to a halt.
Mr Sunak is believed to be considering options including lowing income tax payments or National Insurance.
According to the Times, officials estimate that the package would effectively underwrite 60 per cent of the average wage – which is around £28,000.
The Treasury fears there are ‘significant technical challenges’ to the new approach, and had hoped to delay announcements until next week.
However, the government has been under enormous pressure from unions and MPs from across all parties to act faster. Many companies are already imposing layoffs or cutting working hours.
Mr Sunak said he was ‘working round the clock’ to come up with measures after holding a summit meeting with businesses and union leaders yesterday.
They urged him to ‘pause’ a range of taxes, including National Insurance, income tax and VAT, around £35billion of which is due shortly.
Mr Johnson said at a press conference last night that he was determined not to repeat the mistakes of the 2008 credit crunch, when the government was seen as rushing to the aid of banks but not helping ‘ordinary people’.
‘This time we’re going to make sure that we look after the people who really suffer from the economic consequences of what we’re asking them to do, and we’ll be directing our support to them, looking after the people first,’ he said.
Prime Minister Boris Johnson gestures as he speaks during a coronavirus news conference at 10 Downing Street in London yesterday
Please cover staff salaries to save pubs
A pub landlord yesterday warned that if the Government doesn’t cover staff salaries, the consequences could be ‘worse than we ever imagined’.
Sean Hughes, 38, who runs three pubs in St Albans, Hertfordshire, said Chancellor Rishi Sunak’s measures to save the hospitality industry with grants of up to £25,000 and a business rates holiday were welcome, but more pressing action is needed.
Last orders: Sean Hughes, right, with his parents in St Albans, Hertfordshire
‘If we don’t get salaries covered I think there will be terrible consequences beyond what we ever imagined,’ he said. ‘The hospitality sector will be changed for ever.’
Mr Hughes, who employs 65 workers at his establishments including historic venue The Boot, said he hoped that – with savings – he will be able to hold on to staff for a maximum of eight weeks.
But he added: ‘With sales as they are, we can’t afford to stay open.’
In the Budget just last week, Mr Sunak unveiled a £30billion stimulus for the economy, including £12billion specifically dedicated to the fight against coronavirus.
Sick pay rules have been relaxed to make it easier for people to get money while they are off work in isolation.
As the situation spiralled this week, with Britons urged to avoid all non-essential social contact, the Chancellor announced another £350billion package.
That includes guaranteeing £330billion of loans to businesses, along with £20billion of grants and rates relief, and the promise of a mortgage holiday for homeowners who lose their jobs.
Mr Sunak insisted more measures would be coming, and a ban on evictions for renters has since been announced.
However, demands more much more radical action has been growing. Earlier this week, the government’s own fiscal watchdog floated the idea of footing utility bills and cancelling council tax.
There have also been calls for the UK to emulate the Donald Trump’s proposal to hand every American $3,000 in cash, which forms part of a $1trillion (£852billion) package in the US.
Shadow chancellor John McDonnell has said the government should be paying 90 per cent of people’s wages.
Leading trade union the GMB has called on the Government yesterday to follow the lead of other countries in guaranteeing wages during the crisis.
Sweden, Germany and Austria are already subsidising a shorter working week, with governments halving the costs with employers so that workers keep 90 per cent of their wages, the union said.