Chancellor warned he has 24hrs to avoid “historic mistake” on furlough scheme

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Chancellor warned he has 24hrs to avoid
Chancellor Rishi Sunak. (Image: PA Wire)
// Chancellor Rishi Sunak warned that jobs could be lost if he did not abandon his “one-size-fits-all” furlough withdrawal
// Labour says it could lead to a “python-like” squeeze on jobs and SNP says it’s “dangerously premature”
// From August 1, the furlough scheme starts to get tapered off

Chancellor Rishi Sunak has been told he has 24 hours to change course on the government’s furlough scheme or risk making a “historic mistake”.

Labour warned that jobs could be lost if he did not abandon his “one-size-fits-all” withdrawal of furlough support.

From August 1, employers will have to pay National Insurance and pension contributions for their staff.


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From September, companies will have to pay 10 per cent of furloughed employees’ salaries – rising to 20 per cent in October.

Afterwards, the government support would be withdrawn completely.

Shadow chancellor Anneliese Dodds said the move could lead to a “python-like” squeeze on jobs in some of the sectors that have been hardest hit by the coronavirus pandemic.

Dodds 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,” Dodds said.

“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.”

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”.

“The decision by the Tory Government to cut the furlough scheme in the middle of the global pandemic, and ahead of a potential second wave, is dangerously premature and poses a threat to thousands of jobs across Scotland and the UK,” she said.

“With the first round of cuts to the income support scheme due to begin this Saturday, businesses are already having to plan for the worst.”

A government source told the PA news agency that the support being provided is “comprehensive and generous”.

“This government has worked tirelessly during this crisis to protect jobs, livelihoods and businesses,” they said.

“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 9.5 million people, at a cost of £31.7 billion 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.”

with PA Wires

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