A Conservative London MP has called on the government to extend the job retention scheme that pays “furloughed” workers’ wages to help businesses hit by a plunge in international visitors.
Nickie Aiken, MP for Cities of London and Westminster, and the Association of International Retail have written to chancellor Rishi Sunak to say that businesses such as shops and theatres will need help beyond June, when the scheme is scheduled to end.
The job retention scheme was announced in March and pays 80 per cent of the wages up to £2,500 per month of workers that would otherwise be laid off. As of last Monday, 185,000 businesses with 1.3m employees had applied for the scheme.
Sunak extended the programme two weeks ago, meaning it will now run until the end of June. He said it was “the right decision” after the government extended the coronavirus lockdown for another three weeks.
However, Aiken told the chancellor today that the huge drop in international visitors meant areas like the West End of London would not recover for perhaps six or 12 months, until global travel is back to normal.
She asked the Treasury to extend the job retention scheme so that businesses in international centres such as the West End, Knightsbridge, Manchester, Edinburgh and Bicester Village can manage an extended fall in business.
West End businesses hit hard by travel drop
Aiken said that 50 per cent of the retail sales in the West End alone come from international visitors. She told City A.M.: “It cuts across all sizes of retail whether it’s independent shops or whether it’s the big brands.”
She said almost all businesses in the West End of London are affected: “It’s hotels, it’s visitor attractions, museums, art galleries and also the theatres… as well as bars and restaurants.”
Although some Conservatives such as former chancellor Sajid Javid have said there can be a ‘V-shaped’ recovery, Aiken said that “it’s not going to be an automatic switch to the pre-lockdown situation” when the government lifts restrictions.
“That’s why I’m asking the Treasury team to really consider a sensible, pragmatic tapering approach to the job retention scheme.”
She said that when the government decides to lift the lockdown, extending the scheme would mean companies “can start to re-employ a percentage of their staff” but “those people who are still not required are still protected and not made redundant”.
Aiken added: “We’re all very grateful for the schemes that the chancellor and the Treasury have put in place and it has saved hundreds of thousands of jobs across the country if not millions.”
Jace Tyrrell, Chair of The Association of International Retail said: “The government’s support of those dependent on visitors from abroad has been a lifeline, but cutting the cord too soon would not just be catastrophic for retailers, hotels and their associated businesses.”
“Its cumulative effect would risk London and the UK’s position as a leading global destination. We are asking for this to be considered when the time comes to withdraw support, so that the international retail sector can survive, and go on to thrive again.”