Recover, retrain, rebuild: Shadow Chancellor set out stops to a better, more secure future for Britain

Labour Shadow Chancellor Anneliese Dodds will today (Monday 21 September) set out Labour’s alternative three-step approach to a better, more secure future for Britain: Recover Jobs, Retrain Workers, Rebuild Business.

The Shadow Chancellor will also publish a damning “file of failure” that exposes the billions of pounds wasted and mismanaged by the Conservative government during the Covid crisis.

Paying tribute to the “extraordinary sacrifices” of the British people over the last six months, Dodds will set out Labour’s three steps for Britain’s economy:

Recover Jobs: With a Job Recovery Scheme to enable businesses in key sectors to bring back more staff on reduced hours, with government subsidising a proportion of wages for the rest of the working week.

Retrain Workers: With a National Retraining Strategy to help people whose hours have been cut to increase their skills or to retrain in a new area, and to enable people who have lost their jobs to transition into new work.

Rebuild Business: With a Business Rebuilding Programme to target government support to struggling but viable businesses in the lead up to the Chancellor’s debt repayments cliff edge next year.

Condemning the “enormous amounts of public money” the Conservative government has wasted and mismanaged this year – a “file of failure” that runs into the billions, Dodds will reveal that:

• £130 million was handed over to a Conservative donor for testing kits that turned out to be unsafe
• £150 million was spent on facemasks that weren’t suitable for frontline NHS staff
• £192 million was directed to botched outsourced contracts that have failed to deliver, especially in the critical area of test, trace and isolate
• £234 million was awarded to Edenred for a school meals contract that is now under investigation by the National Audit Office
• A potential £2.6 billion of so-called Jobs Retention Bonus is set to go to businesses who were going to bring staff back to work anyway

Dodds will also criticise Chancellor Rishi Sunak for handing over public money to support businesses with no strings attached, in stark contrast to the more careful policies pursued by other countries. She will contrast Mr Sunak’s “cavalier” attitude to spending public money with her “responsible approach to the national finances”.

The Shadow Chancellor is expected to say:

“I’ve never missed an opportunity to confront financial mismanagement. I’ve spent my political career fighting international money laundering and tax evasion.

“Taking on the tax dodgers, going toe to toe with the tech giants, lifting the lid on shell companies and stopping speculators from driving up prices for ordinary people.

“While the Chancellor was profiting from a financial system that took huge risks and then passed them onto ordinary people, I helped to rein it in.”

Contrasting Labour’s flexible and targeted steps to the Government’s one-size-fits-all approach, Dodds will say:

“Recover jobs, retrain workers and rebuild business. Three steps to a better, more secure future. Government working hand in hand with business and trade unions, in the best interests of our country.

“This is an ambitious Labour vision – where security and fairness aren’t just aspirations, but where they are a reality for families and communities across our country.

“New leadership so people can have hope for the future, with a government that they can trust, not one which plays political games.”

Dodds will also use her speech to outline a vision for a new partnership between government and business, saying:

“As Chancellor, I would restore that trust with business. Because I understand what a critical role business plays in creating jobs and supporting livelihoods across the country.”

Ends

Notes to Editors:

Labour’s three steps to a better, more secure Britain

• Recover jobs: Labour’s proposed Job Recovery Scheme would reward employers who give people hours rather than cut jobs, would be targeted on key sectors and those forced to remain closed or operating at substantially reduced capacity due to social distancing restrictions. It would reward employers who offer their staff high quality training and would include conditions on support to ensure businesses treat their workers well and pair their fair share of tax.
• Retrain workers: Labour’s proposed National Retraining Strategy would bring forward £3bn of funding earmarked by the Government for a National Skills Fund, in order to provide a training offer for the unemployed and those facing unemployment, and to increase capacity in the Adult Education and JobCentre Plus systems of a decade of under-investment.
• Rebuild business: Labour are calling for a Business Rebuilding Programme to deal with the issue of indebted business. More than a million businesses have borrowed money through government-back lending schemes. These businesses face a cliff-edge in support next spring when they have to start re-paying these loans. Many viable businesses may go under without a plan from government, reducing investment and jobs and threatening the recovery. Further support from government must be targeted, consistent with the UK’s net zero target, and provide certainty for business.

The Tories’ billion-pound ‘File of failure’

• The Tories have wasted hundreds of millions of pounds across government during the pandemic. From failed tracing apps to useless PPE to insufficient provision for disadvantaged children, analysis by Labour shows the government has made the wrong decisions throughout the crisis:

• Tory donors Randox Laboratories were awarded a £133m Covid-19 testing contract in May:
  ‘Healthcare firm advised by Owen Paterson won £133m coronavirus testing contract unopposed’, Guardian, 11 May 2020, https://www.theguardian.com/world/2020/may/11/healthcare-firm-advised-by-owen-paterson-won-133m-coronavirus-testing-contract-unopposed
• The DHSC later ordered the withdrawal of 750,000 of the test kits due to safety issues:
  ‘Coronavirus: Randox recalls up to 750,000 test kits over safety concerns’, BBC News, 8 August 2020, https://www.bbc.co.uk/news/health-53705229
• At least £150m of a £252m face masks contract with Ayanda Capital was wasted due to the unsuitability of one type of mask ordered:
  ‘Adviser in £150m PPE scandal is axed’, The Times, 12 August 2020, https://www.thetimes.co.uk/edition/news/adviser-in-150m-ppe-scandal-is-axed-5nw2mnct3
• Serco was contracted for £108m and Sitel £84m to run the national tracing service until late August, when their contracts were renewed despite poor performance:
  ‘Serco and Sitel to get more public money despite track-and-trace fiasco’, OpenDemocracy, 11 August, 2020, https://www.opendemocracy.net/en/ournhs/serco-and-sitel-get-more-public-money-despite-track-and-trace-fiasco/
• The national tracing service was criticised after contacting fewer than half of people who have been in contact with someone who tested positive for Covid:
  ‘NHS is accused of wasting 'eye-watering' amount of money as main 'test and trace' contract costs taxpayers £900 per person contacted’, Daily Mail, 7 August 2020, https://www.dailymail.co.uk/news/article-8602305/NHS-accused-wasting-eye-watering-money.html
• Neither of the national tracing service contracts apply service penalties for poor performance:
  ‘We need to talk about Test And Trace’, Health Services Journal, 14 September 2020, https://www.hsj.co.uk/policy-and-regulation/cowpers-cut-we-need-to-talk-about-test-and-trace/7028436.article
• £234 million was awarded to Edenred for a school meals contract that is now under investigation by the National Audit Office:
  ‘Edenred’s national voucher scheme contract worth up to £234m, new documents reveal’, Schools Week, 7 May 2020, https://schoolsweek.co.uk/edenreds-national-voucher-scheme-contract-worth-up-to-234m-new-documents-reveal/
• After the contract was awarded, parents reported having to wait two weeks to receive the vouchers. In the early weeks of the programme, schools were unable to log into the website to claim vouchers, and schools and parents then reported issues with redeeming them. Both schools and parents were still reporting issues with the system five weeks after it launched. Some parents have reported having vouchers declined at the till. The government was able to end the contract after four weeks, but chose not to:
  ‘Spending watchdog opens inquiry into national free school meal voucher fiasco’, Schools Week, 23 July 2020, https://schoolsweek.co.uk/spending-watchdog-opens-inquiry-into-national-free-school-meal-voucher-fiasco/
• The full document will be viewable here at 2230Hrs www.Labour.org.uk/fileoffailure

Job Retention Bonus

• The Chancellor himself has admitted that his Job Retention Bonus scheme includes “deadweight” costs. Labour’s analysis puts the potential cost of handing this bonus to firms who would have retained staff anyway at £2.6bn.
• HMRC’s Coronavirus Job Retention Scheme (CJRS) time series shows there were just over three million fewer people on furlough on 8 July when the Chancellor announced the JRB than at its peak on 8 May. Assuming 85% moved back into work, this means over 2.6m were already working again by the time the Chancellor announced the bonus:
  https://www.gov.uk/government/statistics/coronavirus-job-retention-scheme-statistics-september-2020
• Note that we have increased the estimate for the number of people on furlough on the 8th of July by 10%, in line with HMRC’s assessment that the numbers published for July are likely to rise by around 10% once all returns are received and revisions are made We assume 85% of those leaving furlough move back into work, in line with the OBR’s central assumption that 15% of workers on the CJRS will move into unemployment:
  https://obr.uk/coronavirus-analysis/

Chancellor Rishi Sunak’s ‘no strings attached’ use of public money

• In a reply to a Written Parliamentary Question on 17th September, Treasury Minister Kemi Badenoch clarified that there are no conditions on the 1.2m firms receiving support through the Coronavirus Job Retention Scheme: https://questions-statements.parliament.uk/written-questions/detail/2020-09-14/89828
• While the Coronavirus Large Business Interruption Loan Scheme includes some conditions on the 516 firms receiving support, there are no conditions on the 60,409 firms receiving support through the Coronavirus Business Interruption Loan Scheme. The Coronavirus Corporate Financing Facility includes some conditions, but none around decarbonisation:
  https://www.gov.uk/government/collections/hm-treasury-coronavirus-covid-19-business-loan-scheme-statistics