Calls for furlough replacement grow louder

Published:  17 September, 2020

While garages face the prospect of perhaps too much work going into the autumn thanks to the end of the MOT exemption, calls for the government to provide a replacement for the furlough scheme have continued.

The Confederation of British Industry (CBI) is the latest body to add its voice, and it is asking for ongoing and targeted support for hard-hit sectors.

The Coronavirus Job Retention Scheme is due to wind up on Saturday 31 October, and has been gradually scaled back on a month-by-month basis since the start of August. At present, The government is paying up to a total of £1,875 per worker, with employers topping up the national insurance, pension contributions and 20% of wages to make sure staff still get 80% of their usual wage.

Even while the furlough was running with months to go, official figures show that UK unemployment rose to its highest level for two years. It reached 4.1% in the three months to July. Previously the rate was 3.9%. Those in the 16-24 age group experienced the biggest drop, with 156,000 less young people employed in the quarter ending in July, compared to the prior quarter.

 Office for National Statistics (ONS) figures also highlighted that staff were being taken off payroll even when the scheme was just starting. Since March, 695,000 people have been removed from company payrolls.

The CBI is keen to see some sectors, including aviation, hospitality and travel and tourism protected.

CBI Director of People and Skills Matthew Percival said: “The easing of lockdown restrictions and a more flexible Job Retention Scheme in July have led to the beginning of a recovery in vacancies and hours worked. But rising redundancies, rising unemployment and a record fall in the number of young people in work are clear warning signs of what is to come. Looking ahead, a successor to the Job Retention Scheme is needed to protect jobs and businesses.”

While garages may be about to be overwhelmed by work, bodyshops face different challenges. In August, the NBRA wrote to the Chancellor of the Exchequer, calling for the furlough scheme to be continued, citing the 80% accident repair claims resulting from much lower traffic levels during lockdown as having dealt a massive blow to the crash repair sector.

Chris Weeks, NBRA Director said: “The only solution to this crisis in our sector is to extend the Coronavirus Job Retention Scheme until there is a significant improvement in work volumes, or at the very least, until the end of December. The work our members do in keeping vehicles in a roadworthy condition is vital.”

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