WATCH: Job retention bonus is “last minute measure”, says Labour

Anneliese Dodds has declared the job retention scheme bonus announced yesterday in the Chancellor’s summer economic update a “last minute measure”, and called for a “more targeted approach”.

In an interview with BBC Breakfast this morning, the Shadow Chancellor reiterated Labour’s call for a sector-specific approach to government support for businesses in the recovery from Covid-19.

She argued that a bonus available to all employers “does not reflect a targeted approach”, and suggested that the policy had only been proposed as a response to “really worrying redundancy figures that we saw over the last week”.

Commenting on the bonus, Dodds said: “It looks like it will be provided to every single employer who takes somebody back off the retention scheme – now some employers may need that money, but others may not.”

She added: “We want to see a targeted approach – we want to see an approach that reflects that some more sectors are far more heavily affected than others. To me, that bonus does not reflect a targeted approach.

“It seems to be quite a last minute measure. You know, maybe the government took this on board after the really worrying redundancy figures that we saw over the last week.”

In another interview with Sky News today, Dodds said Labour is “not going to oppose the measure” but would encourage a “more targeted approach” alongside the bonus – also warning that the incentive could “potentially be very expensive”.

Asked if taxpayer money will be wasted on the scheme, since the bonus will go to employers who would have retained staff anyway, Rishi Sunak told BBC Radio 4’s Today programme listeners that “without question there will be deadweight”.

He argued he had to choose “to act in a broad way at scale and at speed, or to act in a more targeted and nuanced way”. He added: “We did not have the luxury of being able to design something that would target exactly everyone who specifically needed it.”

Commenting on his comments, Labour’s Bridget Phillipson said: “The government has had months to prepare for the end of lockdown and design targeted support to protect jobs – but instead we have an on-the-hoof fix that the Chancellor himself admits risks wasting billions of pounds of taxpayer money.

“Hard-pressed sectors where thousands of jobs are at risk, like aviation, oil and gas, and tourism, will be missing out on the help they need while companies who are returning to normal get public money they don’t.

The shadow chief secretary to the Treasury added: “The Chancellor should be targeting support on those who need it, not handing it out aimlessly to those who don’t. It’s not brave to admit the government plans to waste billions at a time when others are crying out for support.”

Sunak announced a series of measures in a ‘mini Budget’ statement in the House of Commons yesterday, including 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.