Chancellor Rishi Sunak has unveiled an emergency jobs scheme for UK workers as the initial Covid-19 furlough system approaches its end.
Under the terms of the new Jobs Support Scheme the government and firms will continue to top up wages of workers who have not been able to return to the workplace full time due to the coronavirus.
It could see workers get up to three quarters of their normal salaries for six months.
The new scheme, part of a wider package of measures, aims to stop mass job cuts after the government introduced new measures to tackle a rise in coronavirus cases.
Nearly three million workers – or 12 per cent of the entire UK workforce – are currently on partial or full furlough leave, according to official figures.
The current furlough scheme ends on October 31st.
Mark Tanzer, chief executive of ABTA welcomed the move.
He said: “Since the start of the pandemic we have been stressing to the government the unique challenges the crisis has created for the UK travel industry and the toll it has taken on jobs and businesses.
“We welcome this announcement from the chancellor regarding ongoing salary support and renewed business support measures.
“The chancellor spoke today about the desire of people to get back to doing the things that enrich our lives, which clearly includes the ability to travel – whether for holidays, to conduct business, or to see family and friends.”
However, Tanzer said more could be done to help the travel sector.
“ABTA will continue to urge the government to do all it can to ensure travel businesses are supported through the crisis, and that the maximum number of jobs can be retained in our industry.
“In addition to the financial support measures outlined, we also need to see progress on the full regionalisation of the government’s quarantine policy, as well as the introduction of testing to reopen the UK’s links with countries around the world.”
Will Hawkley, UK head of leisure at KPMG, however, said dangers remain for the hospitality sector.
He added: With the ‘Eat Out to Help Out’ initiative already a distant memory, the Job Retention Scheme fast unwinding and Covid-19 re-engaging its firm grip on the nation, the leisure and tourism industry has understandably been feeling uneasy, if not left questioning its survival prospects.
“Depressed demand during the autumn and winter months – both within leisure and tourism – presents its own issue, with the addition of further social distancing restrictions amplifying the challenge.
“While the chancellor may have demonstrated that the sector’s woes have not been overlooked, most businesses are likely to conclude that the extension of the VAT cut, and the latest job support measures don’t go far enough.
“As things currently stand, those that can quickly adapt and evolve their operating models in line with the restrictions will be more successful.
“Sadly not all operators will be able to survive and further job losses will be inevitable without further government support.”
Joss Croft, chief executive of UKinbound, echoed the concerns.
He said: “Undoubtedly, today’s announcement will help many tourism businesses and safeguard jobs, which of course is incredibly welcomed, however, the desperate needs of British inbound tourism businesses, who bring international visitors to the UK and support tens of thousands of viable jobs, have once again been overlooked.
“These businesses have received no visitors since March, cannot pivot to capture domestic business, continue to be excluded from rate relief and grants and, with so few international visitors, will not benefit from the extension of the VAT reduction.
“These businesses are sustainable and will be profitable again, once international tourists can return and are no longer impeded by measures such as quarantine.”
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