The Freight Transport Association (FTA), the business group which represents the logistics industry, has urged the government to use the next stage of its Coronavirus Job Retention Scheme (CJRS) to ease business back to work after the COVID-19 crisis, to prevent significant job losses and avoid decimating recovery plans for companies.
With the Prime Minister set to address the nation about the government’s plans this Sunday (10 May 2020), FTA’s members are concerned that an abrupt removal of the CJRS would cause significant damage to the logistics sector and undo all the good work which its support has given to the sector:
“The CJRS has been the most successful of the government’s financial interventions to support business and safeguard jobs,” says Elizabeth de Jong, FTA’s policy director, “but the support the scheme has given our sector is still needed. Our research shows that 75% of logistics businesses are wholly dependent on furlough payments to keep trading, and to remove this vital lifeline at a time of such trading stress will pull the rug out from under organisations which are already on shaky ground.
“The future of the scheme needs to be an integral part of the Prime Minister’s announcements for back to work on Sunday. Its focus needs to shift from supporting staff not to work to supporting them to work. It needs more flexibility, to ensure that businesses can return to work as quickly as possible, without putting more stress on the financial security of those organisations that will take time to revive their income stream in the coming months. Flexibility is needed to allow employees to return on a part time basis, and to furlough or un-furlough for one week at a time.”
As Ms de Jong continues, recovery will take time, and a sudden removal of support would hurt logistics businesses: “As lockdown rules are eased, the economy will not kick-start again at its previous levels, rather it will be the start of a steady process of returning to work. The CJRS will need to be phased out gradually unless deeper damage is to be done to our economy through more redundancies and less output.
“Critically, there needs to be an urgent decision by government on the future of the scheme, so that it can be communicated to the industry and implemented accordingly. If funding is not available, and groups of more than 100 people are to be made redundant, consultations need to start on 18 May to accommodate the end of the CJRS at the end of June: this is obviously something we all want to avoid, so clear government guidance is vital for the businesses that will keep Britain trading out of this crisis.”