Stop making ‘panicked, last-minute’ decisions or we’ll see a 1980s-style jobs crisis, Labour tells Sunak

Rishi Sunak must lay out a six-month plan to save the economy and prevent a jobs crisis on a scale not seen since the 1980s, shadow chancellor Annelise Dodds has said.

The government defended its support measures in the House of Commons on Tuesday after critics said it had come too late to protect thousands of jobs and still left significant gaps.

Mr Sunak extended the furlough scheme on Saturday just hours before it was due to end, meaning many employers had already made decisions on redundancies.

Ms Dodds called the government’s approach “panicked” and “last-minute”. Labour is urging ministers to meet with other parties to discuss a longer-term strategy.

Alison Thewliss, Treasury spokesperson for the Scottish National Party, said the furlough extension would be “absolutely no comfort to those who have already lost their jobs due to this government’s incompetence”.

She also accused the government of treating Scotland with disrespect by failing to confirm whether the furlough scheme, which covers up to 80 per cent of affected employees’ wages, will be available to the devolved nations after 2 December when the lockdown in England is due to end.

Answering an urgent question on Tuesday Stephen Barclay, chief secretary to the Treasury, restated the support measures laid out by the chancellor. 

Homeowners hit by the pandemic, he said, could continue to claim a six-month mortgage holiday and businesses required to close “can receive non-repayable grants worth up to £3,000 a month”.

He added that the furlough scheme would “always be there to provide support for all parts of the United Kingdom”.

In a letter to the chancellor, Ms Dodds said the last-minute policy changes were “symptomatic” of what she said appeared to be a “lack of any strategic planning by the government to support jobs and businesses”.

“The chancellor’s stubborn refusal to address problems of his own making until the last possible minute is risking lives, costing jobs and causing chaos in the middle of a pandemic,” Ms Dodds said.

“Businesses need certainty if we’re to avoid a 1980s-style jobs crisis, not endless chopping and changing by a chancellor who is always playing catch-up.

“The chancellor must stop this last-minute scramble and use the moment of a national lockdown to set out a proper, strategic plan for the next six months that gives workers and businesses the certainty they need.”

In a further change of plan, the government announced on Tuesday that a proposed cut in benefits for the self-employed would not go ahead.

The minimum income floor, which assumes that self-employed workers earn at least the minimum wage each month and ignores fluctuations in income, was scrapped after the pandemic began but was due to be reinstated.

It will now not be brought back until April, the government said, giving a boost to universal credit payments for many self-employed workers.

It is the latest in a series of changes to financial support measures introduced as a second wave of Covid-19 hits. The chancellor had for months ignored calls to extend the furlough scheme beyond its 31 October end date, before backing down in September and announcing the much less generous Job Support Scheme.

After unions, businesses and the opposition parties warned that the flawed scheme incentivised employers to sack staff rather than keep them on and reduce their hours, the government made substantial changes to it, but the move came to late for some workers who had already been laid off.

On Saturday, after Boris Johnson told the nation that England would go into a new lockdown this week, it was announced that the furlough scheme would be extended for a month.