Rishi Sunak must extend furlough scheme now or face higher costs as unemployment surges
For all the talk of fundraisers and job cuts at British Airways’ owner IAG today, a line in its stock market statement jumps out.
“Iberia and Vueling continue to benefit from the Spanish government’s furlough scheme, which is expected to be extended into 2021.”
As France, Spain, Germany and others extend state-funded furloughs to next year and beyond, Rishi Sunak refuses, saying ours will end in October.
Little surprise, then, that the job losses IAG is imposing here in the UK are massive in proportion to those in its Spanish airlines.
While IAG can wait and see how demand picks up at its Spanish hubs (and domestic bookings look promising), here, it must take a view now and cut jobs accordingly.
Sunak — backed by the optimists at the Bank of England — argues extending furlough only delays the inevitable. And those who get fired must just bite the bullet and find new jobs in other industries.
The trouble is, there are no new jobs in other industries. The Recruitment & Employment Confederation yesterday showed numbers of people jobhunting in August were at their second highest on record. Bosses know furlough ends soon and are cutting staff now. Even if they think trade will be back next year.
Sunak must extend the project, at least for sectors such as hospitality, the arts and travel, which are the worst hit but will hopefully bounce back.
If not, unemployment will hit 9% by December, with all the costs to the economy that entails.
The sooner he does it, the more jobs he saves and the cheaper it gets. Stop wasting time, Rishi.