Labour demands urgent fixes to the furlough scheme
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Labour has today urged the Chancellor to fix the holes in his wage
support schemes to help those excluded from them and boost
Britain’s recovery. On Monday, Chancellor Rishi Sunak resurfaced
after a 41-day absence from Parliament to deliver an economic
‘update’ that contained nothing new. Bridget Phillipson MP,
Labour’s Shadow Chief Secretary to the Treasury, has today written
to the Chancellor warning that his failure to address longstanding
gaps in the...Request free trial
Labour has today urged the Chancellor to fix the holes in his wage support schemes to help those excluded from them and boost Britain’s recovery. On Monday, Chancellor Rishi Sunak resurfaced after a 41-day absence from Parliament to deliver an economic ‘update’ that contained nothing new. Bridget Phillipson MP, Labour’s Shadow Chief Secretary to the Treasury, has today written to the Chancellor warning that his failure to address longstanding gaps in the Coronavirus Job Retention Scheme (CJRS) and Self-Employment Income Support Scheme (SEISS) risks holding back Britain’s recovery. In the letter, Phillipson calls on the Chancellor to: · Update the eligibility criteria for the CJRS so that people who started new jobs after 31 October can qualify for support. · Sort the gaps in SEISS, which is unchanged almost a year after it was first introduced in haste. · Redirect some of the £2 billion in business rate relief returned to the Treasury by supermarkets and other large retail businesses to support those who have been excluded from support for over nine months. The Federation of Small Businesses has warned that a quarter of a million small businesses are at risk of folding, putting Britain’s recovery at risk. After the 2008 financial crash, research by the independent Institute for Public Policy Research (IPPR) showed that small and medium-sized businesses were central to the recovery in the labour market, accounting for 84 per cent of jobs growth between the start of 2010 and the start of 2013. Bridget Phillipson MP, Labour’s Shadow Chief Secretary to the Treasury, said: “We’ve had the worst recession of any major economy, yet we didn’t hear from the Chancellor for 41 days. When he finally resurfaced in Parliament yesterday, he had nothing new to say. “His failure to address the gaps in his economic support schemes has left millions with no support for almost a year, and his refusal to extend eligibility for the furlough scheme past October means ever more people are missing out. “Small businesses were the engine of economic recovery after the last recession, but anyone thinking of starting a new business will think twice after seeing how this government treats the self-employed – and that will damage our recovery.” ENDS Notes to editors
· IPPR finding on labour market recovery after
2008 is summarized in this line from the executive summary of
their 2014 report Small firms, giant leaps: small businesses
and the path to full employment. · Small firms, giant leaps: small businesses and the path to full employment. Institute for Public Policy Research, 2014. Available online at: · On 11 January, the Federation of Small Businesses published its Small Business Index Study, which found that “At least 250,000 UK small businesses set to fold without further help.” ***** LETTER Rt Hon Rishi Sunak MP Chancellor to the Exchequer 1 Horse Guards Road London SW1A 2HQ 12 January 2021 Dear Chancellor, As we find ourselves in yet another lockdown, and with over nine months having passed since you announced the two schemes, I am writing about gaps in the Coronavirus Job Retention Scheme (CJRS) and Self-Employment Income Support Scheme (SEISS), as many businesses and workers continue to fall through the cracks. I was hoping further information on the future of both these schemes would form part of your statement in the Commons on Monday, but it was not to be. When both schemes were launched in March last year, it was immediately clear that significant numbers of people would not be eligible for support. This included the self-employed, many freelancers and those on short-term contracts. As you will know, such employment arrangements are not always a choice: for too many people they are the unavoidable reality of a precarious labour market. The Institute for Fiscal Studies noted that many would “fall through the gaps completely” and estimated nearly two in five people with some self-employed income were excluded. IPSE warned many self-employed were “utterly despondent” and reported fears about covering basic costs like rent and utilities. Meanwhile, the Resolution Foundation found that one in five self-employed workers who did not claim the SEISS had zero income in September. For over nine months, Shadow Chancellor Anneliese Dodds has consistently raised these gaps directly with the Treasury, including three separate interventions last April alone. The government claims many of the biggest gaps result from administrative or operational constraints and reflect the need to deliver novel schemes at speed and scale as the virus spread quickly in March. However, the government has proved unwilling to address these operational issues in the nine months that have passed since. This is despite a number of constructive and creative fixes proposed by business, unions, think tanks and MPs, including the cross-party Treasury Select Committee, and the many contributions from across the House at the Westminster Hall debate last month. Instead, the government spent last summer looking to wind down support schemes as quickly as possible, despite continued economic disruption and warnings from business, unions, the Labour Party and even its own backbenchers. Scientists also continued to warn about the continued prospect of the resurgence of the virus, raising the possibility of future lockdowns and a need for new support measures long before the government accepted the need for these. The government’s refusal to fix the gaps in the CJRS and SEISS means they have been repeatedly extended with only minor changes to their eligibility criteria. Many businesses and workers excluded since March will remain without support through a long and difficult winter and by the time the schemes come to an end in April will have gone over a year without support. In that time many of these problems have actually got worse because of the government’s inflexibility. In particular, your recent welcome decision to extend the furlough scheme to the end of April without changing the eligibility cut-off dates, means that people who started new jobs on or after 31 October are ineligible, and is causing very real hardship for people with seasonal work this winter. Taking up posts before new tiered lockdowns were announced, they cannot be furloughed from those new employments despite the reality of a very different economic context from the one in which employment was offered. Your own Job Support Scheme rightly took account of these circumstances with the JSS-open and JSS-closed distinction, but a similar flexibility is missing and urgently needed within the CJRS. This New Year, many people across the UK feel like a lifetime of hard work is slipping through their fingers. I am concerned that the failure to support self-employed people in this crisis will have lasting consequences for our economy. I fear that the government’s complacency and inaction in offering adequate support to those in self-employment will put people off who are thinking of starting new firms, and make it harder for our country to see the sustainable growth we so urgently need. After the 2008 financial crash, research by the independent Institute for Public Policy Research (IPPR) showed that small and medium-sized businesses were central to the recovery in the labour market, accounting for 84 per cent of jobs growth between the start of 2010 and the start of 2013. It is vital that a fear of being left high and dry by government complacency doesn’t hold back the recovery we all want to see. The government cannot continue to make excuses and blame operational problems for its unwillingness to support those who have slipped through the cracks. It must urgently work with business, unions and MPs to find creative and practical solutions and ensure support is available to those who have missed out. I urge you to review and improve the SEISS in the coming days. It was not designed to deliver support for almost a year and needs to be updated to reflect the duration and scale of the challenge we still face. The huge sums returned to government in recent weeks by retailers who found they didn’t need the support means that there is space for the government to do more and do better for these people, without changing the financial envelope you originally set down. I urge you to move quickly to update the eligibility criteria for CJRS, review and improve the SEISS, and move to support Britain’s recovery and Britain’s entrepreneurs. Yours sincerely, Shadow Chief Secretary to the Treasury Member of Parliament for Houghton & Sunderland South |