Dodds slams Sunak over “last-minute” U-turn on furlough extension

Anneliese Dodds has criticised Rishi Sunak for a “last-minute” U-turn as he announced that the furlough scheme would be extended at a rate of 80% income support beyond the end of the lockdown for businesses forced to close due to Covid.

Reacting to a statement from Sunak this afternoon in parliament on support for businesses impacted by restrictions, the Shadow Chancellor told MPs that “the Chancellor can change his mind at the last minute, but businesses can’t”.

She reminded MPs in the Commons today that this is the fourth change that the Chancellor had been forced to make to his ‘winter economy plan’ over the past six weeks.

Dodds said: “Businesses and workers have been pleading for certainty from this government but the Chancellor keeps ignoring them until the last possible moment after jobs have been lost and businesses have gone bust…

“The Prime Minister said furlough would be extended for a month, five hours before that scheme was due to end. Two days later, realising the self-employed had been forgotten, there was a last-minute change to the self-employed scheme.

“And now, further changes. The Chancellor’s fourth version of his winter economy plan in just six weeks. The Chancellor can change his mind at the last minute, Mr Speaker, but businesses can’t.”

Dodds highlighted that Labour had over recent weeks called on the government to pay 80% of wages for workers under restrictions imposed to stop the spread of Covid in the North, in Wales and in Scotland, but that those calls were rejected.

She added: “How many jobs could have been saved if this government had recognised reality and let businesses plan for the future? Will the Chancellor apologise to those who have already been made redundant because of this last-minute approach?”

The changes announced today mean that workers in a Tier 3 Covid area after December 2nd will receive 80% of their income. Under previous arrangements, they would only have been entitled to 67% through the local furlough scheme.

Sunak told the Commons this morning: “The furlough scheme will not be extended for one month. It will be extended until the end of March. The government will continue to help pay people’s wages up to 80% of the normal amount.

“All employers will have to pay for hours not worked is the cost of employers national insurance contributions and pension contributions. We will review the policy in January.”

The U-turn follows a call earlier this week from Labour for the Chancellor to “stop the last-minute scramble” on economic support and bring forward a six-month plan outlining future support packages from the government.

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.

This latest move by the Chancellor follows weeks of pressure from charities, campaign groups, local authority leaders and regional mayors as well as the Labour frontbench to provide enough support to enable people to self-isolate.

The Bank of England this morning revealed that it would be injecting an extra £150bn into the UK economy. The bank has warned that resurgence of Covid in a second wave will mean a slower recovery from the pandemic.

It stated earlier today that it expects the economy to shrink by a further 2% in the final three months of the year before bouncing back at the start of 2021, assuming the current coronavirus restrictions loosen.

England has entered its second national lockdown of the pandemic today, with all non-essential businesses forced to close and the mixing of different households heavily restricted, for a period of four weeks.

The Commons approved the measures in parliament on Wednesday. Labour voted with the government on the move, which will see hospitality and retail businesses shut while schools, colleges and universities remain open.

Labour leader Keir Starmer used the most recent Prime Minister’s Questions session yesterday afternoon to issue Boris Johnson with a challenge to fix the test and trace system by the end of the four-week lockdown period.

The most recent official figures recorded a daily Covid death toll of 429 with 25,177 people testing positive for the virus. This brought the total number of coronavirus deaths reported in the UK to 47,742.