Labour has warned Rishi Sunak he has less than 24 hours to change course over the furlough initiative or risk making a ‘historic mistake’.
It says jobs could be lost if he doesn’t abandon his ‘one-size-fits-all’ withdrawal of support under the Coronavirus Job Retention Scheme.
From August 1, employers must pay National Insurance and pension contributions for their staff.
And in September, companies will have to pay 10 per cent of furloughed employees’ salaries – increasing to 20 per cent in October.
Shadow chancellor Anneliese Dodds said the move could lead to a ‘python-like’ squeeze on jobs in some of the sectors hardest hit by the pandemic.
She made the comments ahead of a visit to Peterborough with Labour leader Sir Keir Starmer, where the party will launch its nationwide jobs campaign.
‘The chancellor’s refusal to abandon his one-size-fits-all withdrawal of furlough is a historic mistake that risks a python-like squeeze on jobs in the worst-hit sectors,’ said Ms Dodds.
‘The reward for months of hard work and sacrifice by the British people cannot be a P45.
‘It’s not too late for the chancellor to see sense, change course and support the businesses and sectors that need it most. But, even if he does, there is still much to do.
‘That’s why Labour is today launching the Jobs Jobs Jobs campaign, to offer concrete, constructive proposals that would protect the economy and people’s livelihoods.’
Ms Dodds added: ‘The government should back viable businesses that are still impacted by coronavirus, support the self-employed and come up with a plan to drive job creation as we emerge from the pandemic.
‘And it must ensure our NHS and care services are fully prepared for a second wave – because we won’t recover from this economic crisis until the government gets a grip on the health crisis.’
SNP Treasury spokeswoman Alison Thewliss also warned that changes to the furlough scheme were ‘dangerously premature’
A government source told the PA news agency that the support being provided was ‘comprehensive and generous’.
They said: ‘This government has worked tirelessly during this crisis to protect jobs, livelihoods and businesses. At every step we have acted at scale and at pace to ensure as many people as possible are supported during this difficult time.
‘The furlough scheme is unprecedented and has so far supported the wages of 9.5m people, at a cost of £31.7bn and will run for eight months in total.
‘It is not a ‘one-size-fits-all” policy, it is the most comprehensive and generous version of support that can be provided.’
They added: ‘The Labour Party seem to be very good at calling for things, but repeatedly fail to put forward any realistic or detailed plan on how they can be delivered. We are yet to hear, for example, who they think should be left out of this “targeted support” and why.
‘While Labour shout into the wind, this government is getting on with delivering our Plan for Jobs. As the economy reopens, we are adjusting the support provided to ensure people can get back to work and we can rebuild our economy.’
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