The Chancellor has today announced a range of measures intended to boost the economy and support people through the financial impact of the coronavirus crisis.
Along with my Labour colleagues, I welcome the measures as a step towards supporting individuals and families across the country who are worried about what the future brings for their jobs and livelihoods.
However, we remain concerned over the government’s ‘one size fits all’ approach to economic recovery and that too many people, businesses and industries will slip through the cracks of today’s announcements.
Changes to the Furlough Scheme
The government has announced plans to replace the furlough scheme with a new job retention policy. This would see a £1,000 bonus paid to companies for each employee they brought back from furlough and continue to employ until at least January 2021.
Although initially this seems like a positive step, in reality it will be difficult for many businesses to continue to employ staff for at least three months after the furlough scheme ends without any government support. It makes no sense to withdraw support from businesses that are perfectly viable but need more time to get back to capacity – such as pubs, cafes or hairdressers – at the same time as sectors which are already back and open.
The government should reconsider its approach to winding down the furlough scheme and instead focus on bespoke support for the sectors that are struggling most.
Jobs for Young People
On the support announced for young people, I was pleased to hear the Chancellor recognise that under 24s could be the worst affected group by the crisis. Youth unemployment lowers long-term employment prospects and earning potential. And it’s those from the poorest backgrounds with the lowest qualifications are often worst affected.
However, the plan to subsidise 6-month work placements for people on Universal Credit aged under 24 is only a short-term solution. There is no requirement for employers to extend contracts after the scheme ends and many will be left without work.
It is crucial that projects must offer long-term support, involve local firms and lead to material improvement in the quality and availability of local employment.
Support for the Hospitality Sector
Hospitality businesses across the country are facing an incredibly difficult situation, after a long period of closure and vastly reduced capacity now that they are open again. We all want British business back on its feet and doors on high streets to be open again, but the government’s failure to adopt a strategic approach will hamper this.
So, while I welcome the announcement that VAT will be reduced for the hospitality industry, the government could have gone further in its support this afternoon. The government’s plans for an ‘eat out to help out’ discount will be welcomed by many customers, but this only offers limited help for businesses until the end of August.
It is also crucial that businesses benefiting from public funds must treat their employees fairly, refrain from poor tax practice, and play their part in hitting environmental targets.
Green Recovery Plan
Labour have consistently called on the government to invest in an extensive home retrofitting programme to make homes more energy efficient to work towards the goal of becoming net zero carbon.
I therefore welcome the Chancellor’s announcement of funding for to retrofit 650,000 homes, but while a one-off plan like this will help, we need longer term solutions. We urgently need to meet the huge challenge of the climate emergency. We need Britain to be part of the transition to a greener, more resilient, and more sustainable economy. Every single project announced by the government must be consistent with the drive to net zero.
The government was too slow to lockdown, too slow to ramp up testing, and too slow on PPE. After thousands of job losses in the last week, it can’t afford to be too slow again. There’s no time to waste.
Labour has approached the coronavirus crisis in a spirit of constructive opposition and will continue to work with the government as the country and the economy recover.