The government’s Job Retention Scheme has formed an integral part of its response to the Covid-19 pandemic, helping safeguard businesses and employment while many firms are unable to carry out their functions. However, with chancellor Rishi Sunak warning that the initiative cannot go on forever, the government is set to announce the easing of some lockdown measures next week to allow people to return to work and stimulate the economy.
In conversation with the Leaders Council of Great Britain & Northern Ireland, Hugh McAulay, managing director of Bridgend manufacturer Abril Industrial Waxes, discusses his concerns over this move and outlines why some businesses will need the Job Retention Scheme to continue to run beyond June.
Abril is one example of a business that has continued to operate through the Covid-19 pandemic and the ensuing UK lockdown, and is likely to remain busy until the end of May, according to McAulay.
McAulay said: “Considering that we are quite far back in the supply chain, mainly from the car industry around the world, we have largely been unaffected by the furloughing that has devastated some industries but, now as we look forward beyond May, we are seeing demand fall to almost zero in June.”
With demand likely to fall later on than has been the case for most businesses, Abril is more likely to have to weigh-up the possibility of furloughing staff in June and July, whereas elsewhere, other firms will be looking to resume their operations.
McAulay added: “This is a very disappointing scenario for us, but perhaps not unexpected. As the car industry starts up again, albeit tentatively, we can expect some delays in that supply chain before we are able to move back to full production.
“The other industries we serve, mainly the plastics sector of the chemical industry, are doing well but they are not enough to keep us going.”
However, after chancellor Rishi Sunak warned recently that the Job Retention Scheme cannot continue indefinitely and that the government will seek to ease some lockdown measures as early as next week to reboot the economy, McAulay is worried that the government will look to phase out the scheme by June, just as some businesses may well be in need of it.
He said: “My concern, and surely also that of others in our situation in terms of supply chain positioning, is that the UK Government does not prolong the Coronavirus Job Retention Scheme beyond the end of June when we might need it most.
“Although a small player, Abril has contributed to the economy through the worst of times and it would be a great shame if we were to be penalised by the cancellation of this scheme just when we needed to make use of it”.
