Dodds: Chancellor must “stop last-minute scramble” on economic support

Anneliese Dodds has urged the Chancellor to “stop the last-minute scramble” on coronavirus economic support and bring forward a six-month plan outlining future support packages from the government.

In a letter to Rishi Sunak, the Shadow Chancellor expressed concerns about the government’s tendency to change its policy at the last minute after an extension to furlough scheme was announced just hours before it was due to end.

Dodds argued that a six-month plan is now needed to give workers and businesses certainty for the future after the altered stance on the furlough scheme marked the fifth such change of economic policy in just four months.

Commenting on the new demands, Dodds said: “The Chancellor’s stubborn refusal to address problems of his own making until the last possible minute is risking lives, costing jobs and causing chaos in the middle of a pandemic.

“Businesses need certainty if we’re to avoid a 1980s-style jobs crisis, not endless chopping and changing by a Chancellor who is always playing catch-up.

“The Chancellor must stop this last-minute scramble and use the moment of a national lockdown to set out a proper, strategic plan for the next six months that gives workers and businesses the certainty they need.”

The intervention from Dodds follows the announcement from the Prime Minister on Saturday that England will this week enter a second national lockdown, with all non-essential businesses forced to close, for a period of four weeks.

Dodds sets out several issues in her letter that should be covered in the six-month plan, including funding for areas that face local restrictions after the lockdown and support for businesses and workers in case of another later lockdown.

Furlough, or the job retention scheme, was scheduled to end on October 31st and be replaced by the job support scheme. Following the extension of furlough, the implementation of the job support scheme has been delayed until December.

Sunak has been forced to U-turn on five planned Covid measures in recent months, including a local furlough scheme, employer contributions to the proposed job support scheme and recently on the extension to the national furlough support.

The Shadow Chancellor previously accused Sunak of “always running to keep up” during the crisis when he announced the changes to the proposed job support scheme months as many regions faced tighter restrictions.

Labour MPs will be whipped in parliament to vote in favour of the restrictions for the second national lockdown due to start on Thursday, which will see hospitality and retail businesses shut while schools, colleges and universities remain open.

Below is the full text of the letter sent to Rishi Sunak. 

Dear Chancellor,

I am writing to request an urgent meeting to discuss the future of coronavirus-related economic support in the UK given the government’s announcement on Saturday of a new four-week national lockdown. The nature of that announcement, given just hours before many of the existing economic support measures were due to come to an end, will have caused millions of workers and businesses significant and unnecessary anxiety.

This is sadly symptomatic of what appears to be the lack of any strategic planning by the government to support jobs and businesses. Instead, we have had a succession of ‘plans’ based on core economic assumptions that have proved to be overly optimistic given the government’s inability to get a grip on the health crisis – each one having to be dropped and replaced with something else as the evidence that it was not going to work became undeniable.

I fully appreciate that none of us can foresee the exact trajectory of Covid-19 but this short-sighted approach is making a bad situation worse. I urge you to use this moment to work with others to set out a proper, strategic plan for the future that can adapt to changing circumstances and give businesses and workers the certainty they desperately need.

I would ask you to meet me to discuss how this could be achieved, along with stakeholders such as trade unions and businesses. This process should enable the setting out of different scenarios for the UK economy over the next six months, and appropriate responses to those different scenarios.

It should consider solutions to problems such as:

• The need for continued, transparent and consistent support for any areas which might remain, following the lockdown, subject to additional restrictions.
• The need for contingency plans for support for jobs and businesses should additional nationwide restrictions be imposed in the future by the government and/or the government extends the existing lockdown.
• The urgent need for income protection for groups not currently covered by recent announcements, from the self-employed to those who have not qualified for existing support due to their employment arrangements, to those who do not qualify for social security because of savings or for other reasons, to the impact of the five-week wait for Universal Credit payments.
• The future for support for local authorities over the next six months and beyond, given the likelihood of continued pressures on their ability to raise revenue.

The need to answer these and other questions in a strategic, coordinated manner is becoming ever more urgent given last weekend’s announcement. I stand ready to help, as, I am sure, do trade unions and businesses. I urge you to meet with me and relevant stakeholders so that we can learn the lessons from recent months and give businesses and workers the stability and security they need in these extraordinary times.

Yours sincerely,
Anneliese Dodds MP
Shadow Chancellor of the Exchequer