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Rishi rides to players' rescue as Knight's shining armour looks faded

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Liverpool chief executive Peter Moore. Photo: Getty

Liverpool chief executive Peter Moore. Photo: Getty

Getty Images for Leaders

Liverpool chief executive Peter Moore. Photo: Getty

After a week of vitriolic criticism levelled at football clubs for using the UK Government's scheme to put some employees on furlough during the Covid-19 crisis, some balance was finally applied on Wednesday.

Considering that the culture secretary, Oliver Dowden, had warned some Premier League clubs the scheme was not for them, and his fellow Conservative MP Julian Knight accused clubs of operating in a "moral vacuum" by furloughing staff while still paying players, the source of the measured response was perhaps unlikely: their own chancellor, Rishi Sunak.

He was asked at the Government's Covid-19 press conference about reports that British companies could put a remarkable nine million people on furlough, which, as the Government pays 80 per cent of a person's wage up to £2,500 per month, could cost the British Treasury £40bn in three months.

Sunak did not respond by saying, as Dowden did about football clubs, that his scheme was not designed for people employed by billionaire owners, nor that it has to be a last resort. He did not say, as Knight did about football, that if companies are still paying other employees much higher wages they are in a moral vacuum.

On the contrary, Sunak said the high take-up was a sign of the scheme's success. It was set up for all seriously affected businesses, as a huge economic stabiliser for an unprecedented shutdown, aiming to prevent millions of people being laid off and consigned to the poverty-level welfare of the Government's universal credit system.

"We [set up the scheme] so that people were not . . . unemployed, they had a good income to get them through this, and they remain attached to their company and their employer," Sunak explained. "If it ends up being significantly used I will view that as a success."

Newcastle, Tottenham and Liverpool, owned by Mike Ashley, Joe Lewis and John Henry's FSG respectively, look like a neat collection of least deserving cases. These are billionaire owners, Lewis in a tax haven; they had not looked to subsidise furloughed employees' wages from players' galactic pay, so were depicted as grasping at public money. Critics pointed to Liverpool paying agents £44m last year, making a £42m profit, paying a £310m wage bill, to scorn the furloughing of shop and administrative workers while football is suspended.

The spectacle of players paid so much makes a glaring contrast and many Liverpool supporters did feel their club's cherished values were being contravened. As has been seen, however, the issue of players taking pay cuts is not straightforward for clubs. Players are employed as assets clubs can sell and their contracts are protected; if their pay is cut, they become free agents. They have been lauded now for contributing to charity via the #PlayersTogether initiative agreed after talks between the captains of all 20 clubs but that has nothing to do with pay cuts. Still, none have been agreed at any of those clubs.

Similar critiques could be made of many major profitable companies but the scheme was not set up as a moral test or to carry stigma. Sunak said football clubs and all companies should use the scheme responsibly but he specifically did not require company owners or higher-salaried employees to pay furloughed staff's wages, nor for companies to show they do not have cash. Nor do companies have to pick painfully through the complications of their particular business before putting some employees on furlough.

Dowden's argument that the scheme was set up for struggling companies, not those owned by billionaires, is wrong. Some of Britain's largest companies are making very substantial use of it. They are supported by trade unions, who were consulted on its design and are mightily relieved it enables people to remain employed, on wages they can live on.

To take just one example, British Airways' owner, International Airlines Group, is costing the government many, many millions, having furloughed 30,000 staff. IAG last year had a £23bn turnover, made a £2bn post-tax profit and paid shareholders £630m in dividends. Its major shareholder is Qatar Airways, owned by the world's richest per capita state. No Government minister scorned this vast corporation for using the scheme, or complained at so much UK Government money being advanced to pay its staff. Unite the Union welcomed the deal, saying: "This is what can and should be done to protect workers."

Although the scheme is a grant not a loan, the public finances will have to be restored when the crisis is finally over and companies and employees, including footballers, will be required to contribute, via higher UK taxes if the government deems that necessary.

Liverpool did, though, buckle under the criticism, their chief executive, Peter Moore, saying he was sorry and reversing the decision. Yet after the U-turn, a note of "deep concern" was sounded by the Labour MP and Liverpool supporter Ian Byrne, who wrote to Dowden arguing the stigma could discourage other clubs from protecting people's livelihoods using the furlough.

As for Knight, a representative of several top players said they were aware the MP had written a book in 2004 giving advice for tax avoidance. We put that to Knight. He did not respond.

Observer

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