Burberry shuns coronavirus furlough scheme: Fashion giant says it won’t use taxpayer cash to pay its staff
- Many companies using the furlough scheme have paid their execs bumper pay
- At Burberry, bosses have taken a 20% pay cut while its shops stay closed
- Here’s how to help people impacted by Covid-19
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Burberry has taken a stand in the growing row over the Government’s wage subsidies as it announced it was not prepared to tap up the taxpayers to pay furloughed staff.
The British fashion stalwart said a third of its workers would remain at home on full pay, without a penny being billed to the taxpayer, while bosses have taken a 20 per cent pay cut.
Like all non-essential retailers, it is reeling after being forced to shut all its shops during the Covid-19 lockdown.
Striking: Supermodel Kendall Jenner stars in Burberry’s latest Spring/Summer fashion campaign
Burberry, which has 9,860 staff around the world, said yesterday: ‘We will continue to maintain base pay for all employees who are unable to fulfil their roles because of store or site closures. We will not rely on government support for jobs in the UK where more than a third of our employees are based.’
It emerged that 18 FTSE 100 companies, which have taken advantage of the Government’s Coronavirus Job Retention Scheme, have awarded more than £300million to their chief executives since 2015.
These include Barratt Developments, which has 5,500 staff on furlough and has handed out £20.1million in pay and bonuses to chief executive David F Thomas in the last five years.
British Airways has placed 36,000 staff on furlough after paying its chief executive Willie Walsh £19million since 2015. The Government last night said 512,000 businesses had applied for £4.5billion in wage subsidies for 3.8million furloughed employees.
The spiralling cost has fuelled concerns that the scheme is being used by ultra wealthy business owners who can afford to pay staff out of their own pockets during the lockdown.
Other super-rich owners such as Victoria Beckham, Sir Philip Green, owner of Topshop, and Mike Ashley, a major shareholder in Sports Direct, have also faced criticism for using the scheme.
But a few firms have been praised for shouldering the cost of staff wages.
Flutter, which owns Paddy Power, is paying staff despite its 350 UK shops being closed.
Unilever has also chosen not to use the scheme, while fund supermarket AJ Bell said government aid ‘should be preserved for those companies that need them most’.
Decisions: Flutter, which owns Paddy Power, is paying staff despite its 350 UK shops being closed
Carys Roberts, director of the Institute for Public Policy Research think-tank, said: ‘The Government should be doing all it can to support ordinary families, not to subsidise excessive executive pay and dividends, or business-owners who avoid paying their taxes.’
Andrew Pendleton, director of policy at the New Economics Foundation, said: ‘With people dying in hospital it is in extremely poor taste to use schemes that are designed to keep staff in work to protect your own wealth.’
A report next week by the High Pay Centre will say that the FTSE100 firms which are using the wage subsidy scheme have handed out £321million in pay to their bosses over the last five years.
These include Primark and Next, which have furloughed close to 110,000 employees between them, Rolls-Royce, Premier Inn owner Whitbread, Autotrader, Taylor Wimpey and Easyjet.
The pressure group also found that the same 18 companies paid £12billion in dividends to shareholders between 2015 and 2019, from total profits of £42billion.
Sir Richard Branson, whose Virgin empire is registered in the tax haven of the British Virgin Islands, sparked an outcry earlier this week after demanding an emergency £500million loan from the Government to save Virgin Atlantic, while furloughing 8,000 staff.
Robert Palmer, executive director of Tax Justice, said: ‘The UK should exclude tax haven companies from coronavirus relief. Companies that seek to dodge their obligations to society by cutting their tax bills shouldn’t expect a bailout when things go wrong.’
Virgin says it pays all the tax it owes in all the countries it operates in.
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