Viaduct club owner warns staff may be laid off as the Government furlough scheme tapers

The Government reduced the contribution it makes to the Coronavirus Job Retention Scheme (CJRS) on Thursday, with employers having to start paying.

New figures show that 2.4 million people moved off the scheme between the end of February and the end of May as businesses reopened.

Around 2.4 million people remain furloughed or flexi-furloughed, down from a peak of nearly nine million at the height of the pandemic in May last year.

Terry George, owner of Viaduct Showbar in Leeds, said he would have to lay off workers because of the taper to furlough, with around 30 per cent of his staff still on the scheme.

Mr George, an entrepreneur who also owns Bar Fibre, said: “We are concerned this is going to be something that we can’t afford to pay people out of a pot that has no money coming in,” he told Today.

“We’re going to have to lose some staff.

“I think the most obvious thing would be to extend the furlough in its full form.”

Martin Greenhow, director of MOJO, said his workforce are back at work, but he feels for those in the nightclub and tourism industries.

"We're all back at work so it isn't touching us.

"I do feel for the nightclub sector because, to be honest, it's immoral that they're having to find yet more contributions to keep people in gainful employment when they're being legally restricted from opening, which is just farcical.

"For the people in travel and aviation - god. We've had our tribulations but for those in the tourism industry it must be like being inside a snow globe that someone keeps deciding to pick up and shake. It must be hard.

"As long as people are allowed to go to work then furlough needs to be curtailed because we will all be paying it for god's knows how long - but you have to let people work if you're not going to pay them."

Ending the furlough scheme too early could kill any recovery before it even starts, unions have warned.

GMB union general secretary Gary Smith said: “Ending the furlough scheme too quickly could kill a recovery before it even starts.

“Ministers’ ‘open-mindedness’ over an extension to the job retention scheme needs to become a reality.

“Instead of driving us off a furlough cliff-edge later this year, the Government should provide continued support for employers that need it – especially in those sectors that have been hammered by the pandemic.

“Our recovery is a process, not an event. Ministers are seriously misguided if they think we can suddenly revert to business as usual.”

Steve Turner, assistant general secretary of the Unite union, said: “Industries such as aviation, automotive and hospitality are still on the ropes, hit hard by repeated lockdowns, supply chain disruption and inconsistent government decisions, which is why we have always argued that the UK furlough scheme needs to match those of our competitor countries and be continued until at least the spring of 2022.

“The country has invested billions in keeping people in work ready for recovery, but, if ministers ‘pull the rug’ from under businesses too soon, jobs will go and our heroic national investment will be wasted.”

Manuel Cortes, leader of the Transport Salaried Staffs Association, said: “This is a terrible decision from those in power at Westminster to start phasing out furlough support while we remain in a pandemic.

“It will put workers at greater risk of being laid off – none more so than in our travel trade which has been hit so hard by the pandemic.

“Removing furlough support for our travel trade smacks of wilful ignorance because Government knows perfectly well that the industry has really not been able to trade in any meaningful way now for over a year.

“This has led to intolerable pressure on jobs and businesses up and down our high streets.

“If ministers had any sense they would recognise that there are some sectors which have not had the chance to recover, because of the nature of their business. That is certainly the case with our travel trade.”

But Business Secretary Kwasi Kwarteng defended the beginning of the taper to the furlough scheme while restrictions are still in place.

“The furlough was an exceptional policy in extreme times, in unprecedented times, and it was always the case that furlough was going to come to an end at some point,” he told Today.

A Government spokesman said: “We deliberately went long with our support to provide certainty to people and businesses over the summer, and that support, which is a substantial amount of funding, is continuing with the furlough scheme in place until September.

“Recent statistics show there are 7.85 million workers aged 50 to 64 on payrolls – up 181,000 on the year.

“But as we recover from the crisis we’re also helping hundreds of thousands of older workers to retrain, build new skills and get back into work through our Plan for Jobs, including our 50 Plus: Choices Offer, the Sector-Based Work Academy Programme, and our Job Entry Targeted Support scheme.”