Jeff Smith: ‘Government must deliver an emergency budget to protect jobs’

The Government was too slow to recognise the scale of the health crisis caused by coronavirus, and we are paying the economic price.

I am worried that the slow and confused health response is now being followed by a similarly slow response to saving jobs. The window is closing to protect existing jobs and encourage firms to invest in creating new ones.

There were 4,710 people in Manchester Withington claiming for Universal Credit and other benefits last month, an increase of 119.6% since the outbreak of coronavirus. Although this is an imperfect measure of unemployment, it hints at the scale of the looming jobs crisis in our community.

Reports that the government has pushed back its next full budget to the Autumn are worrying, as we’re already lagging behind other countries like Germany, which announced a full economic package weeks ago.

We need an urgent package of economic measures with a clear focus on jobs.

Supporting this, we need a strategic withdrawal of the coronavirus support schemes, tailored to the needs of specific sectors and areas.

The Job Retention Scheme is supporting 10,300 working people in Manchester Withington, while 2,900 are using the Self-Employment Income Support Scheme.

Labour called for and welcomed these schemes, but we are concerned about the Government’s plans for their abrupt withdrawal which risks pushing millions of people into unemployment. The Chancellor plans to withdraw support for all sectors and areas of the economy at once, and has not linked his plan to other public health measures, such as easing social distancing guidelines where it is safe to do so.

This one-size-fits all approach won’t work for sectors like hospitality. Pubs, restaurants and cafes will be operating well below capacity when they eventually re-open, and their fortunes will be closely linked to the decisions that are taken on social distancing. It makes no sense to withdraw support for the 3935 hospitality workers in Manchester Withington at the same time as for workers in other sectors that are able to operate as normal.

Similarly, firms relying on tourism face losing the majority of trade from the summer high season. Snatching away all support in October, just as the high season ends, could be ruinous for the tourism sector and the roughly 4150 jobs it supports in our area.

I’m joining my Labour colleagues in calling on the government to urgently act to protect jobs and incomes by:

  • Bringing forth an urgent ‘Back to Work Budget’
  • Preventing even more people being made redundant, by acting on those employers who continue to refuse to furlough affected workers.
  • Fixing blockages in the business loan schemes so businesses can access the support they desperately need.
  • Urgently tackling the situation for those currently excluded from the Government’s self-employment scheme and the furlough scheme.
  • Turning Universal Credit advances into grants and considering additional changes to improve UC.
  • Making all workers, including low-paid workers, eligible for Statutory Sick Pay.
  • Increasing the level of Statutory Sick Pay.
  • Spearheading international coordination to prevent financial system-wide problems caused by the crisis.
  • Make public the proposed exit strategy to ensure economic measures remain appropriate in protecting the long-term future of businesses and workers.

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