The UK government has announced that its coronavirus job
retention scheme, which pays some of the wages of employees on furlough due to the pandemic, will
be extended until October 2020. The news has been welcomed across the travel industry,
with many saying it will be a “lifeline” for companies.
Chancellor Rishi Sunak announced the four-month extension of
the scheme today after several industries called for more support over the
summer due to the expected slow recovery in many sectors. There are currently
7.5 million people currently being paid 80 per cent of their wages up to £2,500 a month
before tax through the scheme.
However, Sunak said employers will be asked to “start
sharing” the cost of the scheme from August by bringing furloughed staff back
on a part-time basis.
He said: “I’m extending the scheme because I won’t give up
on the people who rely on it.”
Tim Alderslade, CEO of Airlines UK, who last week told MPs
on the Transport Select Committee that the aviation industry faced a “cliff
edge” that could put their businesses at risk without an extension to the
scheme beyond the end of June, welcomed the news but warned airlines will still
need more support to get back in the air. “This is a welcome announcement and
we are pleased that from August staff will be allowed to come back to work
part-time. With aviation’s recovery due to be prolonged and uncertain owing to
ongoing travel restrictions, including the 14-day quarantine period proposed by
the government, more action is needed to protect our world-leading aviation
sector. Our focus remains on working with government on the measures required
to allow for an effective re-start and recovery of our industry.”
Karen Dee, chief executive of the Airport Operators
Association, added: “The extension of the job retention scheme and the promised
flexibility from August is a major step forward and will be welcomed by all
airports.
“However, with open-ended quarantine restrictions planned,
aviation is unlikely to be in a position to recover meaningfully before
October. This was underlined this morning by health secretary Matt Hancock
saying that it is ‘likely to be the case’ that summer holidays will be
cancelled.
“Other countries have already taken dramatic steps to
support their aviation industries. The chancellor should do likewise to ensure his
economic support measures are truly world leading and prevent UK aviation from
falling behind our global competitors.”
Meetings Industry Association CEO Jane Longhurst said: “Having
highlighted the particular plight of our sector, we are grateful that the
government has listened, and from the start of August the scheme will have greater
flexibility to allow employers to bring furloughed employees back part-time.
“Without the extension, our recent research was predicting
8,402 job losses of skilled and unskilled workers among our 800 mia members
alone. We now await further clarity later this month on how employers will
start sharing the cost of paying the salaries with the government.”
Lex Butler, chair of the Hotel Booking Agents Association,
said: “The job retention scheme extension has prevented thousands of
redundancies in this industry at the end of June – but further support is essential
for the sector’s survival.
“Almost half of the HBAA’s agent and venue members who
responded to our survey this week said that they would have had to make at
least 50 per cent of their staff redundant at the end of June if the scheme had
not been extended.”
The HBAA is calling for further support measures, such as
commercial rent relief, support for sole traders and those who take dividends
as part of their income, as well as the continuation of business rates relief
and the Business Interruption Loans Scheme.
And Business Travel Association chief executive Clive
Wratten commented: “This will be a great support to millions, especially those
across the business travel supply chain who will play a crucial role in
re-igniting the UK economy. We will continue to examine the details as they
emerge and look forward to even greater collaboration with the government to
get Britain moving again as soon as it is safe to do so.”
The extension to the scheme comes as British Airways is
launching a consultation with employee representatives about up to 12,000
redundancies in a restructuring move. Ryanair is also due to cut up to 3,000
jobs and another 3,000 are at stake at Virgin Atlantic.
Len McCluskey, general secretary of the Unite union, said
that while the extension is a welcome announcement, “we’ll need to look at the
detail when published but today’s announcement is a message again to employers
that the government will stand behind them if they stand behind their workers.
There should be no rush to redundancies.”