“We can’t afford dead weight”: Labour attacks new job retention bonus scheme

Sienna Rodgers

Labour has attacked the Chancellor’s job retention bonus scheme today by making the argument that the programme to get furloughed staff back to work is not targeted enough and “we can’t afford dead weight”.

In his media round this morning, Rishi Sunak admitted that there would be “dead weight” involved in the initiative, which will see employers receive £1,000 bonuses for every staffer retained and could cost an estimated £9.4bn.

Labour leader Keir Starmer has picked up on the comment and hit back, saying: “Some are really at risk of losing their jobs, so we say it should have been targeted in the areas that most need it, not across the piece.

“The Chancellor has admitted there is a dead weight in his package – we can’t afford dead weight, we need the money to go where it is absolutely needed most and that’s those jobs that won’t be retained if the government doesn’t support them.”

Bridget Phillipson, Labour’s Shadow Chief Secretary to the Treasury, this morning said: “The government have 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 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.”

Commenting on the job retention bonus on Wednesday, Anneliese Dodds said Labour would be supporting the plan despite much of the money going to employers that have already decided to bring back furloughed workers.

The Shadow Chancellor did, however, call for “a more targeted approach” and specified that Sunak should “set out conditions” for the scheme to ensure that it does not become a “dead weight cost”.

It has been revealed since the announcement of the job retention bonus scheme that the HM Revenue and Customs chief executive Jim Harra raised concerns with the Chancellor about its value for money.

In a letter sent to Sunak on the eve of Wednesday’s summer update, Harra said there was a “sound policy rationale” for the scheme but “the advice that we have both received highlights uncertainty around the value for money of this proposal”.

The scheme therefore went ahead with a ministerial direction, which allows government ministers to tell their department to go ahead despite there being objections from the most senior civil servant in that department.

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