UK government accused of acting too late to save jobs in second lockdown

·Senior City Correspondent, Yahoo Finance UK
·3-min read
Exiting the European Union Secretary (Brexit) Stephen Barclay responds to an Urgent Question by Labour leader Jeremy Corbyn in the House of Commons, London on the European Union (Withdrawal Agreement) and extension letter.
Stephen Barclay MP, chief secretary of the Treasury. Photo: PA

The UK government has defended its last minute extension of support schemes for jobs and businesses, which critics say comes too late to protect many jobs and still leaves significant gaps.

Stephen Barclay MP, chief secretary of the Treasury, faced questions from opposition MPs on Tuesday who accused the government of acting too late to protect jobs as a second lockdown begins.

Over the weekend, the chancellor was forced to extend the government’s job retention scheme until the end of the November, after the last-minute decision to put the UK into a month-long second lockdown.

As late as Friday afternoon, the Treasury had still been preparing for the launch of the job support scheme, which was due to replace the furlough programme. Unlike furlough, the job support scheme only offered support to “viable” jobs.

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

Christine Jardine, Liberal Democrat MP for Edinburgh West, said businesses had made “irreversible decisions based on advice from the government that furlough was going to end on Saturday.”

The BBC reported at the start of the month that half a million job cuts have been planned since the start of the pandemic. Economists say the end of furlough has acted as a key spur for the timing of many cuts.

Barclay said that people can be rehired and placed on furlough under the new extension.

Shadow chancellor Anneliese Dodds chided the government for ignoring Labour’s calls last month for a two week “circuit breaker” lockdown. She said the government’s decision to delay had cost lives and livelihoods and said the government “stumbles from one crisis to the next.”

Dodds called on the chancellor to set out a comprehensive plan for how the government would support jobs and business moving forward, rather than simply giving guidance for the next month.

Jardine urged the government to extend the furlough programme until at least next spring.

READ MORE: Furlough pushed 2 million employees below the UK minimum wage

Barclay said the government had already spent £200bn ($260bn) supporting the UK economy through the crisis and said the furlough extension and other support measures would “provide security to millions of people while giving businesses the flexibility to adapt and plan.”

The government announced on Monday that support grants for the self-employed would be doubled and extended support loans to businesses until the end of January.

Business groups have cheered the plans but urged the chancellor to go further. The Confederation of British Industry (CBI) is calling on Sunak to commit to keep the furlough scheme running for as long as lockdowns persist. This would prevent “cliff edges” for businesses that prompt job losses, the president of the CBI said on Tuesday.

The Institute of Directors (IoD) said “significant gaps” still remain in the support for the self-employed. The Association of Independent Professionals and the Self-Employed estimates up to 1.5 million self-employed people are unable to access government support due to the narrowness with which the programme is written.

“Many small company directors continue to go without support, it’s long past time to sort this problem,” said Roger Barker, director of policy at the IoD.

Tory MPs Mel Stride and John Redwood on Tuesday urged Barclay and the Treasury to overhaul the self-employment income support scheme to broaden its coverage.

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