Tata Steel says it WILL take £2.7m furlough retention bonus
Tata Steel says it WILL take £2.7m furlough retention bonus after John Lewis and Primark pile pressure on big firms by turning down the taxpayer handout
- Tata Steel, which runs Port Talbot steelworks, has around 8,000 UK employees
- The Indian company furloughed around one third of its staff in during lockdown
- Steel suppliers took a hit during lockdown as factories shut and building slowed
Published: 07:14 EDT, 13 July 2020 | Updated: 09:24 EDT, 13 July 2020
Britain’s biggest steel maker Tata Steel has confirmed it will take advantage of the government’s multi-million pound furlough retention bonus, after John Lewis and Primark turned down the taxpayer handout.
The Indian-based company, which runs the Port Talbot steelworks in South Wales, furloughed around a third of its 8,000 UK employees at some stage during the pandemic – meaning it could receive around £2.7million from the government.
A spokesman for the steel giant told the FT: ‘Our use of the furlough scheme allowed us to retain vital skills and experience within the company to not just keep the business going in these difficult times, but to prepare to serve our customers as they ramp up their operations too.’
John Lewis and Primark have turned down the bonus, which together would be worth around £44million.
The Job Retention Bonus pays out £1,000 for each furloughed employee who returns to work and is paid the lower earnings limit of £520 per month between the end of the furlough scheme in October and the end of January 2021.
Britain’s largest steel manufacturer, Tata Steel, says it will accept a grant thought to be worth around £2.7million from the government
The Prime Minister’s official spokesperson said it is ‘great’ that some employers have waived the furlough bonuses.
He added: ‘We welcome the decision of Primark and others to do so. For those that need further support the £1,000 bonus will represent a significant benefit to them.’
John Lewis, which furloughed 14,000 staff during lockdown, is set to reject the government’s bonus scheme, potentially missing out on £14million.
Rishi Sunak unveiled the Job Retention Bonus during a mini-budget to get Brits back to work last week
It comes after the retailer confirmed that eight of its stores will not be reopening after closing for lockdown.
The ailing department chain will permanently close major sites in Birmingham and Watford, as well as smaller outlets at Heathrow airport, St Pancras train station in London and four At Home shops in Croydon, Newbury, Swindon and Tamworth.
Primark has also announced it had rejected around £30million in ‘bonuses’ from the government for bringing back furloughed staff, it was revealed today
The firm had furloughed 30,000 staff and is said to have burned through £800million of cash during the coronavirus crisis – but made profits of more than £900million the previous year.
How does the Job Retention Bonus work?
The government has supported more than one million businesses to protect nine million jobs by furloughing them during the Covid-19 pandemic.
With the scheme expected to end in March, Rishi Sunak last week announced the Job Retention Bonus, to encourage companies to keep their furloughed employees.
The Treasury’s website explains: ‘The government will introduce a one-off payment of £1,000 to UK employers for every furloughed employee who remains continuously employed through to the end of January 2021.
‘Employees must earn above the Lower Earnings Limit (£520 per month) on average between the end of the Coronavirus Job Retention Scheme and the end of January 2021. Payments will be made from February 2021.
‘Further detail about the scheme will be announced by the end of July.’
McDonald’s and Wetherspoons are both currently assessing the chancellor’s announcement, while other businesses have yet to indicate where they stand on the policy.
McDonald’s is thought to have furloughed 135,000 employees and, under the chancellor’s scheme, could be in line for a £135 million grant.
Wetherspoons furloughed 43,000 staff, meaning it it could be in line for a £43 million grant.
A spokesman for Wetherspoons said: ‘We will consider this issue in the next few months,’ adding the pub chain had paid just under three quarters of a billion pounds in taxes last year and around £450million this year.
Other firms could also be in line for a significant amount of money, including Greene King at £38 million, Greggs at £25 million and the Arcadia Group at £14.5 million.
However, they have yet to confirm whether they’ll take up the money.
According to the Sunday Times, William Hill is also set to reject the bonus payments.
Back in April it was reported that the steel giant was seeking a £500million funding package from the UK and Welsh governments after many of its customers, such as car manufacturers, halted production during the crisis.
The Government had introduced a Coronavirus Large Business Interruption Loan Scheme, which offers loans of up to £50 million to UK-based businesses with a turnover of over £45 million.
But the company, which was already beset with financial issues which forced the closure of it Newport plant last year, is in need of funding 10 times the sizes of what is currently allowed.
Last week Chancellor Rishi Sunak, introduced the Job Retention Bonus, offering firms £1,000 for every worker they bring back into work, even if the company is already up and running following the coronavirus lockdown.
