New scheme covers six months from November
The chancellor, Rishi Sunak, has outlined the next raft of government measures to support businesses trying to deal with the fallout from Covid-19.
The Winter Rescue Plan will replace the furlough scheme, which is due to end in October.
The new plan will see the government top up the pay of employees who are working fewer than normal hours. However, staff must work at least a third of their hours to access the scheme.
The government contribution will be capped at £697.92 per month.
However, it leaves many travel companies – where revenue has been reduced to virtually nothing – facing the prospect of potential redundancies.
Mark Tanzer, chief executive of ABTA , 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 today’s announcements from the chancellor regarding ongoing salary support and renewed business support measures, which are an important part of ABTA’s plan to Save Future Travel and support travel businesses through the difficult winter season ahead. We await the full details of today’s announcements in order to truly assess what this will mean for travel businesses going forward.
“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.
“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. Getting those measures in place as quickly as possible is vital to boost confidence in travel, and that will be critical to the survival of many travel companies. We also believe that the chancellor should consider an APD cut ahead of next summer to incentivise people to book their well-deserved holidays in 2021.”
Julia Lo Bue-Said, CEO at Advantage Travel Partnership added: “Following today’s update from the chancellor, it does look as though there are elements to the government support that will benefit employees, however it does look less attractive for businesses and raises the question of whether this will actually help prevent redundancies. From the plans outlined, if an employee is working a third of their hours, businesses would be paying 55 per cent of their wage for only 33 per cent of their time, with the government then contributing another third towards their salary – which is not sustainable for businesses.
“What’s more, many firms within the travel industry will have already initiated, or completed redundancy consultations with their staff already following months of little to no revenue being generated. We understand blanket support like the furlough scheme cannot continue, but we have been calling on our government for sector-specific support for months now, and in order to protect travel industry jobs in the long-term, we must be able to book and sell holidays. The only way to do that is to improve consumer confidence and we believe securing the government’s support on testing at ports of entry would be a viable option. Testing on arrival and then again 5 days later would help to reduce the length of quarantine which is causing so much anxiety for consumers and ultimately loss of revenue for travel agents and the wider industry. British jobs depend on the government to act swiftly and consider the grave economic impact if the issue of testing is delayed further. We await further clarification and details on the scheme that are due to follow next Tuesday.”