The government’s furlough scheme is “encouraging idleness,” and should have been cut off sooner, Luke Johnson told attendees at MCA’s The Conversation.

Johnson, who’s Risk Capital Partners backs hospitality brands including Gail’s Bakery, All Star Lanes and Lussmanns, said he had reservations about the comparatively high percentage of the salary subsidy from the beginning, and whilst it “has been generally good for the hospitality industry” it’s time that we all  “wean ourselves off this addictive subsidy, because it can’t carry on.”

Across his 60-strong Gail’s Bakery estate, Johnson said that although some branches remained open throughout the pandemic on a takeaway basis, and almost all stores have reopened since, “there was a low point when we thought we were going to have to shut our branches because we were struggling to get staff to turn up.”

Admitting that some staff were genuinely frightened, he added that “some of them perhaps felt they were enjoying sitting at home on 80% of their salary, not having to pay the commuting costs and so forth.”

And this is an attitude he fears has been adopted by a proportion of the 8 million furloughed employees across the country.

“They’ve got out of the habit of working and one might almost argue that there’s been a bit of malingering going on, which is most unfortunate,” he said, “paid idleness is good for no one.”

With furlough set at 80%, Johnson added that as a large proportion of hospitality businesses will be unable to contribute in any capacity to the subsidy by August, the industry is set to see “a large number of redundancies.”

“I think an awful lot of businesses will say to staff either come to work or you’ll be made redundant,” he said.

“We will see that come into play soon because with large numbers of redundancies there has to be 45 days’ notice for consultation.”

“So, I completely agree with the government, they must end furlough.”

“And there is no question in my mind that for a lot of people on furlough is just delayed redundancy.”