Wales faces job losses without Treasury lockdown support, Drakeford says

By Adam Hale and Rod Minchin, PA
·4-min read

Workers in Wales face losing their jobs if the UK Treasury does not waive the eligibility requirements of its furlough scheme, First Minister Mark Drakeford has said.

The Welsh Labour leader’s warning came after Chancellor Rishi Sunak rejected his request to bring forward a new job support scheme by a week to accommodate the start of Wales’ two-week lockdown on Friday.

The restrictions, which will require people to stay at home and non-essential businesses such as pubs and shops to be closed, will last until November 9 and coincides with the school half-term.

The current job retention scheme being used in the UK, which will run until the new support scheme is launched on November 1, is currently only available for workers who were furloughed for at least three weeks prior to June 30.

On Tuesday, Mr Drakeford said in a letter to Mr Sunak that people not eligible for the scheme faced redundancy if their employers were unable to access financial support to pay their wages before the newer scheme kicks in.

“Employers with no income will be faced with the difficult decision of paying all of the wage costs of these employees or making them redundant,” he said.

“It makes no sense from the point of view of the UK Exchequer to have to meet the possible long-term costs of paying out-of-work benefits to these individuals for the sake of one week’s support on the JRS.

“Will you therefore agree in these exceptional circumstances to waive the requirement for employees for whom JRS is claimed for this period to have been on furlough for at least three weeks prior to June 30?”

HEALTH Coronavirus Wales
(PA Graphics)

Mr Drakeford later told the Welsh Parliament he found it “difficult” to understand why Mr Sunak had rejected his earlier request to bring forward the JSS scheme by a week.

“It cannot be that it was financial reasons that prevented him from agreeing to that, because we agreed as a Welsh Government to pay the additional £11 million that it would’ve cost the Treasury from our own resources if that was the sticking point,” Mr Drakeford told MSs.

“So, it can’t have been turned down on cost grounds, and it is difficult to see why the Chancellor didn’t feel that he was able to play his part.”

He added: “We keep offering solutions and so far the UK Government keeps turning them down.

“I do hope the Chancellor will find a different answer in his repertoire in response to my letter today.”

Wales’ economy minister Ken Skates told Tuesday’s Welsh Government Covid-19 briefing that ministers were “continuing to press” Westminster to provide support to businesses during the two-week firebreak lockdown.

He also announced the Welsh Government was doubling the third phase of its Economic Resilience Fund, making nearly £300 million available to support businesses.

“The virus has not gone away and if we do not act now with a two-week firebreak there is a very real risk that our NHS will be overwhelmed and we could see large numbers of people dying because of coronavirus this winter,” Mr Skates said.

“This cannot be allowed to happen and doing nothing is simply not an option.

“The firebreak is an absolute necessity and through the firebreak businesses will be supported with a combination of UK Government and Welsh Government support.”

Under the third phase of the Economic Resilience Fund there will be:

Payments of £1,000 for businesses that are eligible for Small Business Rates relief and occupy a property with a rateable value of £12,000 or less.

Payments of up to £5,000 for retail, hospitality and leisure businesses that are required to close and which occupy a property with a rateable value of between £12,001 and £50,000.

A discretionary £2,000 top-up grant for businesses closed or materially affected by the firebreak lockdown.

A further discretionary £1,000 grant for businesses that were materially affected by local lockdown measures for 21 days or more prior to the start of the firebreak.

Mr Skates also said that introducing the firebreak now would allow businesses to plan for the upcoming Christmas trade.

“Countless businesses have told me in recent weeks how important the pre-Christmas period is to their trade and we hope that through this two-week, short, sharp firebreak, we can give them a clear run at that vitally important economic opportunity,” Mr Skates said.

A welcome to Wales sign near Llangua in Monmouthshire, south-east Wales (Ben Birchall/PA)
A welcome to Wales sign near Llangua in Monmouthshire, south-east Wales (Ben Birchall/PA)

On Tuesday it was announced there were a further 1,148 cases of Covid-19 diagnosed in Wales, bringing the total number of confirmed cases in the country to 37,400.

Public Health Wales said 10 further deaths had been reported, with the total number of deaths since the beginning of the pandemic rising to 1,722.