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Sunak resists calls to extend furlough scheme despite mounting job losses

Time 9 months ago

Chancellor Rishi Sunak is resisting calls to extend the furlough scheme to stave off widespread job losses.

Sunak has said the scheme cannot go on ‘indefinitely’ and must come to an end, despite many industries slashing staff.

The car industry has seen a swathe of job cuts as manufacturers and dealer groups cut jobs.

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It is widely thought the automotive retail world will make around 20 per cent of its workers redundant as many car dealerships move to a hybrid of online and physical sales which they are discovering need less staff to facilitate.

Last week, Pendragon boss Bill Berman told Car Dealer that the car industry should be ‘braced for more job losses’ as dealers fight for a ‘piece of a smaller pie’.

In an exclusive interview, he told us: ‘I see a lot of it and I see a lot more of it will happen on the OEM side. 

‘My guess is that at some point over the next several months everyone will have some kind of restructuring cost-savings plan – they will have to and everyone is in the same boat.’

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The furlough scheme has so far cost £33.8bn supporting the payrolls of 9.6m workers during the coronavirus crisis and has now begun tapering off, before ending in October.

Opposition parties are calling for the government to extend it for the hardest-hit sectors and those plunged into local lockdown, warning the end to the scheme is a ‘grave mistake’.

The travel and hospitality sectors, as well as aerospace and automotive industries, have all been hit hard by the coronavirus crisis. 

Sunak warned ‘there is hardship ahead for many people’ as he ruled out extending the jobs retention scheme again.

Speaking to Sky News, he said: ‘It’s one of the most difficult decisions I’ve had to make in this job.

‘I don’t think it’s fair to extend this indefinitely, it’s not fair to the people on it. We shouldn’t pretend there is in every case a job to go back to.’

He also declined to extend the measure for sectors unable to return to work, such as the entertainment industry with theatres still shut.

The SNP’s Westminster leader Ian Blackford has warned ‘thousands of people could lose their jobs unnecessarily’.

He said: ‘Cutting the furlough scheme prematurely is a grave mistake. By removing this crucial support in the middle of a global pandemic, and withholding the financial powers Scotland needs for a strong recovery, the Tories are increasing the risk of mass redundancies.’

The chancellor has set out a ‘plan for jobs’ which includes measures to boost apprenticeships, stimulate eating out and a job retention bonus of £1,000 for every furloughed employee retained in January.

Several car dealer groups – including Pendragon, Lookers and Jardine – have all announced large redundancy programmes as well as some car dealership closures.

meanwhile, one in three companies expect to make redundancies by the end of September, a new survey has found.

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The 33 per cent figure – revealed in a survey by human resources body the Chartered Institute of Personnel and Development (CIPD) and recruiter the Adecco Group – represents a rise from 22 per cent of companies shown in the groups’ spring quarterly report.

The latest survey suggests the jobs market will continue to shrink through the summer quarter, with the number of employers expecting to hire workers falling further below the number planning for redundancies.

The report said its disparity marker between the two categories of employers fell four points from the spring quarter to -8, the lowest it has been since the survey’s current methodology was adopted in 2013.

James Baggott's avatar

James is the founder and editor-in-chief of Car Dealer Magazine, and CEO of parent company Baize Group. James has been a motoring journalist for more than 20 years writing about cars and the car industry.

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