Travel sec­tor in div­i­dend of­fer to keep fur­lough scheme run­ning

The Daily Telegraph - Business - - Business - By

Oliver Gill TRAVEL firms are of­fer­ing to hand div­i­dends to the Ex­che­quer in re­turn for an ex­ten­sion of the Gov­ern­ment’s fur­lough scheme un­til the end of the year.

With hopes of a re­cov­ery this year snuffed out by the rein­tro­duc­tion of travel quar­an­tines, the busi­ness travel in­dus­try will this week urge min­is­ters to con­sider a “para­chute pack­age” to res­cue com­pa­nies from ruin.

The rad­i­cal pro­pos­als, put for­ward by the Busi­ness Travel As­so­ci­a­tion, are in­tended to be self-fund­ing and de­signed to not leave tax­pay­ers out of pocket. Firms will pledge to pay 10pc of quar­terly div­i­dends to the Gov­ern­ment un­til the cost of bankrollin­g of wages has been re­paid.

With Bri­tons able to travel to about a third of coun­tries with­out be­ing quar­an­tined on their re­turn, hopes were raised at the start of last month that the op­er­a­tors may be able to sal­vage some­thing from a tur­bu­lent year.

How­ever, fears of a se­cond spike of coron­avirus on the Con­ti­nent prompted Boris John­son to rein­tro­duce a quar­an­tine on ar­rivals from Spain and Lux­em­bourg.

Min­is­ters have warned re­stric­tions will be ex­tended to other coun­tries struck by ris­ing in­fec­tion rates, prompt­ing hol­i­day­mak­ers to de­lay or can­cel their plans. Busi­ness travel book­ings are down 90pc since March. In­dus­try lead­ers say the reim­po­si­tion of quar­an­tines has had a “mas­sive neg­a­tive ef­fect on the con­fi­dence of Bri­tish busi­ness to travel”.

Rishi Su­nak’s fur­lough scheme, which has al­ready cost the tax­payer more than £30bn, is sched­uled to end in Oc­to­ber. Labour has urged the Chancellor to re­think that de­ci­sion with fore­casts that un­em­ploy­ment will hit its high­est level since 1993.

An­neliese Dodds, the shadow chancellor, has called for tar­geted sup­port for in­dus­tries un­able to re­turn to busi­ness as usual. The BTA pro­pos­als would mean that pri­vate equity firms such as Car­lyle and Sin­ga­pore’s sov­er­eign wealth fund GIC, which co-own Amer­i­can Ex­press GBT, would forego re­turns un­til the cost of ex­tend­ing the fur­lough is re­paid.

The trade body backed wider in­dus­try calls for a tem­po­rary re­duc­tion in air pas­sen­ger duty. It said a sus­pen­sion of the levy for the next 12 months would en­cour­age bosses to travel, pro­vid­ing a sig­nif­i­cant trade boost.

Clive Wrat­ten, head of the Busi­ness Travel As­so­ci­a­tion, said: “Tar­geted and lim­ited gov­ern­ment sup­port for the busi­ness travel sec­tor will not only save jobs, but un­der­pin one of the vi­tal sup­port pil­lars for Bri­tish busi­ness.”

The pro­pos­als fol­low a rare in­ter­ven­tion by Sir Adrian Mon­tague, chair­man of the com­pany that owns Manch­ester and Stansted air­ports, who warned that gov­ern­ment travel pol­icy threat­ens to suf­fo­cate the avi­a­tion in­dus­try.

Blan­ket travel quar­an­tines to coun­tries like Spain, he said, were “un­nec­es­sary” and min­is­ters should im­ple­ment a “more pro­por­tion­ate” re­sponse. The for­mer Aviva chair­man also poured cold wa­ter on pro­pos­als to in­tro­duce a Covid test­ing regime on hol­i­day­mak­ers. He said: “If the Gov­ern­ment was able to be more tac­ti­cal in the way that it ap­proached quar­an­tine … then that would un­lock hol­i­days for peo­ple.”

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