Labour MPs Siobhain McDonagh and Angela Eagle have challenged Rishi Sunak on the lack of childcare support for female workers in his summer economic update last week.
Appearing before members of the Treasury committee this afternoon, the Chancellor faced questions on his economic recovery plan for the country amid the coronavirus pandemic.
McDonagh said women had been disproportionately affected by the economic consequences of the health crisis, telling Sunak: “We are 51% of the population, we are more likely to lose our jobs, and to not do the hours we normally do.”
Eagle raised the fact that the Chancellor had failed to mention childcare once in the ‘mini Budget’, despite the government acknowledging that women have been disproportionately impacted by Covid.
“It was about a 22 minute statement,” the Chancellor replied. “And there are probably many, many, many parts of the economy, many sectors, many types of families that have been impacted that we couldn’t mention in 22 minutes.”
He added: “With regard to childcare and nurseries in general what I can say is that nurseries this year have received a full business rates holiday for the 12 months.
“And those childcare providers are receiving all the government funding the would have got regardless of whether they are actually getting those children in.”
Sunak also faced questions over the lack of help for an estimated three million people in the country who have been unable to access any support throughout the crisis from any of the government’s programmes.
Labour’s Rushanara Ali said: “This crisis has obviously created huge problems and with your response and inability to take into account those who have been left out – the three million – it does feel like you’ve stopped listening.
“What do you have to say to that? And is there anything you can do in terms of reconsidering to help the three million households that still haven’t had the help that they need?”
The Chancellor replied: “It’s not a question of not listening, it’s a question of a decision that I took to target support on those who I thought most needed it and to draw a line at a place that I thought was reasonable.”
The committee members also discussed the job retention bonus announced in the summer economic update – the MPs raised particular concerns with the way in which it fails to target support and would result in “dead weight”.
Eagle highlighted how the National Institute of Economic Research said that the Chancellor’s recovery package was “poorly timed and could trigger a sharp rise in unemployment rising”.
She also reminded members that both the ‘eat out to help out’ and job retention bonus schemes had to be given “ministerial direction by you, because the chief accounting officer in HMRC wasn’t convinced that they were value for money”.
Ali added to those concerns on the specifics of the job retention bonus scheme, warning that the policy revealed by the Chancellor last week will lead to “perverse incentives”.
She said: “Businesses bringing back people that they might have made redundant so that they can benefit from the furlough scheme and getting rid of people who might have put their lives at risk in order to do their jobs during the pandemic.”
Sunak replied by asking which group of people they thought “should not be eligible for the job retention bonus”. He added: “We’re hearing it should be more targeted, but being more targeted means people should be excluded.”
The scheme revealed by the Chancellor in the economic update last week will see a £1,000 bonus for employers for every furloughed employee that they bring back to work until at least January
To qualify for the bonus, workers must be paid at least £520 each month on average. Analysis suggests that if all furloughed employees were brought back this way, the scheme would cost a total of £9bn.
Labour has criticised the policy, arguing that the programme to get furloughed staff back to work is not targeted enough, and that the country “can’t afford dead weight”.