The UK government has responded to the UK-wide travel industry petition calling for the extension of furlough beyond October for the travel industry.
In a statement, sent out to over 50,000 people who showed support for the petition, the government said that it “remains open to discussions about bespoke financial support but only as a last resort” but that “the Government’s judgement has been that it would be extremely challenging to extend the CJRS for specific sectors in a fair and deliverable way”.
The Chancellor announced that a new Jobs Support Scheme will replace furlough at the end of October. He said that the new scheme will allow employers to keep employees in a job on short hours rather than making them redundant.
This is extremely disappointing news for the struggling travel industry.
Peter McMinn, Managing Director of Travel Solutions said: “The recent announcement by the Chancellor of the Job Support scheme to be introduced in November gives no support to the struggling outbound travel sector. Asking a business to contribute a minimum of 55% of an employees salary when the business has been unable to trade for the past six months – and in the Prime Ministers view – for the next six months, clearly shows no understanding of the pressures the sector is experiencing. Unless help comes quickly, the high street travel agent will become extinct!”
In its response to the petition, the government said: “The Government will continue to provide comprehensive support to sectors and the economy as a whole to ensure that jobs and livelihoods are protected.
“The Government recognises the challenging times facing the travel industry as a result of COVID-19. The sector is important to the UK economy, and firms in the sector are able to draw upon the unprecedented package of measures announced by the Chancellor, including a Bank of England scheme for firms to raise capital, Time to Pay flexibilities with tax bills, financial support for employees and VAT deferrals. The measures have been designed to ensure that firms of any size receive the help they need to get through this difficult time.
“The Coronavirus Job Retention Scheme (CJRS) is specifically designed to protect jobs and support businesses threatened by the pandemic, across the whole country and across all sectors. The scheme has successfully protected over 9 million jobs to date, and will close after running for eight full months.
“However, the Government’s judgement has been that it would be extremely challenging to extend the CJRS for specific sectors in a fair and deliverable way, and to do so may not be the most effective or sensible means by which to provide longer term support for those sectors most affected by COVID-19.
“It would also be difficult to target the CJRS at specific sectors without creating distortions, particularly since many firms work across multiple sectors. There are other schemes including the Coronavirus Business Interruption Loan Scheme that can provide support to firms in the travel industry. Businesses in the travel industry will also be able to claim under the Job Support Scheme if they meet the eligibility criteria. More guidance will be published shortly.
“If firms across the most affected sectors find themselves in severe and urgent financial difficulties as a result of COVID-19, even following the Government‘s cross-economy wage and financial interventions, then the Government remains open to discussions about bespoke financial support but only as a last resort. Any intervention would need to be on terms appropriate to protect the interests of taxpayers.”
The petition currently sits at 50,168 signatures. If the support reaches 100,000 signatures, this petition will be considered for debate in Parliament.
Please sign the petition here.