The furlough trap
Good news from media land today – and a future trap for big business.
The Spectator issued an impressive statement saying it will pay back the money it received from the government under the furlough scheme.
Chairman Andrew Neil says that while some parts of the business have been badly hit, “overall our magazines have weathered the Covid crisis better than we expected”.
There’s reason to think that’s true of other publications too.
Neil adds: “We do this not to set an example for other companies to follow but because we can afford to do so.”
Well, it is an example whether he means it to be or not.
Will other businesses follow suit?
Those that don’t are going to face intense scrutiny over everything they do for long into the future.
A business that took taxpayer money is going to remain under pressure on job cuts, pay cuts and much else.
I don’t see how a company that furloughed staff and didn’t return the cash later can possibly expect to get away with paying dividends to investors or bonuses to directors.
No one really considered the spirit of the furlough scheme at the time, just the rules.
The spirit of it is going to be retrospectively applied and that is going to catch out some big fish, I predict.
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