Short-term working scheme could replace furlough to help stave off more job losses in car industry

Time 1 year ago

A new ‘short-time working scheme’ could see firms offered cash support to help keep people in jobs at the end of the furlough scheme.

Chancellor Rishi Sunak is said to be weighing up new packages to avoid mass redundancies when the Coronavirus Job Retention Scheme comes to an end next month. 

Proposals to stave off job cuts across the country being considered include a cut to employers’ National Insurance contributions and an extension to business rates holidays.


The CBI has also submitted a plan to the Treasury – which it is carefully considering – that would support part of the wages of staff working at least half their usual hours.

The Times reports that the business group wants the short-time working scheme to be ready by November 1 to replace furlough.

The CBI said the scheme would be available to businesses that do not take the £1,000 job retention bonus being paid to companies that take staff back from furlough and keep them on until the end of January.

It proposes that staff would get 100 per cent pay for the hours worked and then for the remaining hours two-thirds of their usual money, with half paid by the government and half by the employer. 

Sunak is said to be carefully considering the plan.

The furlough scheme has been extensively used by the car industry – from manufacturers to car dealers – and has helped stave off huge job losses.

Despite the scheme, though, many in the car industry have lost their jobs, with most dealer groups revealing they have cut staff by around 20 per cent.

Yesterday (Sep 15), it was announced that nearly 700,000 UK workers have lost their jobs since March, when the coronavirus lockdown began, but the true impact on the motor industry is still unknown.

Many automotive companies have already announced job losses, with Cambria Automobiles warning only last week that it would be cutting more.

The Office for National Statistics (ONS) said the rate of unemployment increased this month as another 36,000 jobs fell off payrolls across the country.

These are the motor industry businesses to announce they will be cutting jobs since lockdown began:

  • Imperial Cars – 300
  • National Accident Repair Centre – 540
  • BMW & Mini – 520
  • Pendragon – 1,800
  • Vertu Motors – 345
  • Jaguar Land Rover – 1,100
  • Bentley – 1,000
  • Aston Martin – 500
  • Lookers – 1,500
  • McLaren – 1,200

… and these are the businesses that have made announcements. Many more have cut jobs without revealing them.

Union leader Len McCluskey, general secretary of Unite, is urging the prime minister to take action to prevent ‘redundancy floodgates’ opening as the furlough scheme ends.

He has written to Boris Johnson warning that workers face a ‘miserable’ Christmas because of fears of huge job losses when the job retention scheme ends.

Unite said today was a ‘milestone’ because employers are legally obliged to give workers 45 days’ notice of redundancy.

The union fears that without an urgent sign of the government responding to calls from across business and the political spectrum for longer-term support to save jobs, employers facing short-term struggles will issue redundancy notices.

A Treasury spokesman said: ‘The furlough scheme has done what it was designed to do – save jobs and help people back into employment.

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‘And many of our unprecedented interventions – including the Job Retention Bonus, business rates holidays, VAT cuts and the Kickstart Scheme – will ensure this support continues into next year.

‘We’ve not hesitated to act in creative and effective ways to support jobs and we will continue to do so as we recover from this crisis.’

Redundancies: Everything car dealers need to know about laying staff off

Rebecca Chaplin's avatar

Rebecca has been a motoring and business journalist since 2014, previously writing and presenting for titles such as the Press Association, Auto Express and Car Buyer. She has worked in many roles for Car Dealer Magazine’s publisher Blackball Media including head of editorial.

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