Labour demands “smart” furlough extension with new terms and conditions

Labour has announced a new economic policy for Covid: Anneliese Dodds is calling on the government to introduce a “smart” furlough scheme extension to protect jobs as long as coronavirus restrictions are in place. The TUC had already made the extension demand, pointing out that unemployment has surged whenever furlough is under threat or wound down. The job retention scheme is currently set to end in April, and we are expecting to learn more about its future when Rishi Sunak delivers a Budget on March 3rd – but the Chancellor’s preference for confirming crucial support only at the last minute will be damaging once again, as the extension if granted will come too late for some.

What does “smart” mean? Labour wants furlough extension to come alongside “new training to help furloughed workers improve their skills”, “tough conditions on employers to stop abuse”, an overhaul of the “failing” kickstart scheme for young people and reform of the green homes grant “to help create clean new jobs”. Dodds is looking at furlough schemes abroad – in France, Germany and the Netherlands – where there are more conditions attached and training is incentivised. The aim is to reduce the rise of post-furlough unemployment, which is something Spain says it has achieved (it helps that participating companies could not sack staff for six months after furloughing them).

Bridget Phillipson in the shadow Treasury team has written for LabourList about Sunak’s favoured policy of free ports (customs-exempt territories). This proposal was heavily criticised by Barry Gardiner on LabourList in 2019, when he was responsible for Labour’s trade policy, and Labour is still expressing concern about its impact. As the Shadow Chief Secretary to the Treasury explains, the idea is that certain activities will be more profitable in free ports and this will stimulate the economy, but there is a risk that jobs are simply moved rather than created and a risk that it encourages tax avoidance. There are also serious concerns about the Towns Fund-like process for establishing the free ports.

Our local government week with LGA Labour continues today with the theme of building back better. Labour’s local government lead Steve Reed has set out a plan for bringing Britain back together, with thoughts on inequality of power and the constitutional commission recently launched by Keir Starmer. Islington leader Richard Watts has a piece on the government’s failure to provide financial support to local government despite promising to do just that at the start of Covid-19. And Leeds leader Judith Blake has written about putting children and young people at the centre of our coronavirus recovery. We’ll have more from Dan Jarvis and others very soon.