Don't take the money! Business leaders urge top companies to forgo millions in Government bonuses for putting furloughed staff back to work
- Only businesses in dire straits encouraged to use government bonus payouts
- Several leading firms said they won't claim money under the £9billion scheme
- Labour MP Darren Jones said trading businesses should not claim any money
Leading firms were urged yesterday to forgo millions of pounds in Government bonuses for putting furloughed staff back to work.
Business leaders and MPs said that the public funds should be claimed only by companies in dire straits.
Taylor Wimpey, Barratt Homes and Redrow said they will not be claiming payouts under the £9billion Job Retention Bonus Scheme announced by Chancellor Rishi Sunak last week.
They have already promised to hand back millions of pounds to the Treasury after furloughing thousands of staff, and bringing them back as construction sites were reopened.
A Barratt spokesman said: ‘All of our employees, other than those shielding, have returned from furlough, and Barratt will not be using the Job Retention Bonus Scheme.’
A spokesman for Redrow said: ‘We will not be looking into, or utilising, the Government’s Job Retention Bonus.’
Their latest promise follows similar commitments made by retailers Primark, John Lewis and gambling giant William Hill.
In contrast Tata Steel, part of a business empire controlled by one of India’s richest families, has said it does intend to apply for the bonuses, which are worth £1,000 for every furloughed employee brought back to work.Britain’s biggest steel maker, which runs the Port Talbot steelworks in South Wales, is struggling for survival and has been pleading for a £500million taxpayer bailout.
It furloughed roughly a third of its 8,000 staff in the UK, meaning it could be entitled to bonuses worth up to £2.7million.
Despite Tata Steel’s financial difficulties, its biggest shareholder is Tata Group, an Indian conglomerate controlled by the super-rich Tata family.
Brewing giant Young’s, which starts reopening its pubs later this month, has also indicated it will apply for the Job Retention Bonuses.
It furloughed 4,500 staff, meaning it could be eligible for bonuses worth up to £4.5million.
The chairman of the Commons business committee appealed to companies to ‘do the right thing’ and take the bonuses only if they needed the money.
Labour MP Darren Jones said: ‘If businesses are trading, have cash coming in, and are intending to retain their workers, then they should do the right thing and not take this public money in the first place.
Richard Branson's company Virgin Atlantic said it had not decided whether it would use the scheme yet
‘It’s welcome that some businesses are signalling they will do the right thing and act in good faith, and I hope that if other businesses are in similar circumstances they will follow this lead.’
Business groups also urged firms only to apply for the lifeline if they desperately need the cash.
Edwin Morgan, director of policy at the Institute of Directors, said: ‘Government support has been, and will continue to be, vital for many businesses.
'If a company gets to January and finds they don’t need the bonus, they should definitely consider not taking it, sending a positive signal to consumers and the public.’
The Confederation of British Industry stressed the Covid-19 support schemes were ‘intended as a lifeline for those struggling to stay afloat’.
It added: ‘The vast majority of businesses know this and are committed to taking only what is required. If some companies do not need to apply for the bonus scheme then that is of course welcome.’
John O’Connell, of the Taxpayers’ Alliance, said: ‘It’s good news to hear that some companies won’t be using the bonus scheme.’
Most of the companies contacted by the Mail – including Sir Philip Green’s Arcadia empire, Virgin Atlantic, Nissan, Rolls-Royce and EasyJet – said they had not decided whether to apply for the bonuses.
Most companies contacted by the Mail, including Philip Green's Arcadia empire, said they had not decided if they were going to apply for bonuses
Some have said they are waiting for the Government to publish more details of the scheme later this month.
But they may find it difficult to turn down the windfalls because their takings in most cases have been hammered.
McDonald’s is thought to be in line for around £100million, while Wetherspoon’s, which furloughed 43,000 staff, could be eligible for up to £43million.
The bonuses are designed to prevent mass unemployment when the Job Retention Scheme, which is supporting the wages of 9.4million workers, closes at the end of October.
To qualify for each £1,000 bonus, furloughed staff have to be working for the company until next February – three months after the Job Retention Scheme closes.
Firms can also claim a bonus for any furloughed employee, even if they were brought back months ago.
The Institute for Fiscal Studies has warned that money will be wasted on workers who would be retained anyway and predicted staff may be laid off after the three-month period.
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