A Glasgow MP has called on the Chancellor to initiate an investigation into a hotel group that is making mass redundancies after using the furlough scheme.

Stewart McDonald, Glasgow South SNP MP, has written to Rishi Sunak branding the hotel group IHG (which owns the Blythswood and Grand Central hotels) actions “morally reprehensible”.

Mr McDonald said the group is intending to use cash from the Coronavirus Job Retention Scheme to pay the notice of staff it is making redundant.

He said this is “morally, and potentially legally, problematic” under the rules of the scheme.

The hotel group said any action it is aking is within the rules.

Around 200 staff at the Blythswood Hotel and many at the Grand Central were furloughed when hotels were forced to close during the lockdown.

Last month the staff were, along with staff at three IHG hotels in Edinburgh, told they were at risk of redundancy,

The group has around 2500 staff on furlough across the UK, whose wages are paid by the UK Government.

Uniteand the MP said that the taxpayer funded furlough scheme is intended to prevent mass redundancies like that proposed by IHG.

Mr McDonald said furlough cash cannot be used to make redundancy notice payments.

He said: "For firms to use money they have received through the Coronavirus Job Retention Scheme to pay the notice pay of staff is morally, and potentially legally, problematic given the recent changes made by the Treasury now explicitly prevents employers from using furlough money to pay the severance package of staff.

"The guidance explicitly states that 'Grants cannot be used to substitute redundancy payments'.”

Mr McDonald said he fully appreciated the difficulties faced by all businesses but he added: “To receive taxpayer funded support aimed at protecting jobs, only to then announce mass redundancies is morally reprehensible and goes against the goodwill that the CJRS was established for.

“Treasury officials must investigate employers to ensure the money they have received is used to protect jobs and pay wages – the very reason the CJRS was created for.”

He said people’s livelihoods must be protected and warned of negative impact on the reputation of employers who do otherwise.

Bryan Simpson, Industrial Organiser at Unite Hospitality, said: "The Government Job Retention Scheme was established for the specific purpose of allowing employers to continue paying staff in order to avoid large scales redundancies like these. 
“For a company of this size to access the scheme and then seek to terminate up to 95% of loyal employees by way of redundancy before the scheme has even ended, placing a further burden on the state is corporately irresponsible and may see it having to pay back the money it has received thus far through the CJRS"

A spokesman for IHG, said: “When the lockdown first started we hoped our industry would bounce back quickly and using the Coronavirus Job Retention Scheme enabled us to keep as many people in Glasgow employed for as long as possible.

"We now know it will unfortunately take time for travel and tourism to return to pre-coronavirus levels with at least one of our Glasgow hotels not reopening until 2021, which is well beyond the lifespan of the CJRS scheme.

"We have launched a consultation to resize and restructure our hotel teams which sadly is likely to involve some redundancies.”