Labour urges ministers to act now, ahead of April business ‘bombshell’

Elliot Chappell
© Willy Barton /
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Labour has warned that businesses across the country will be hit by a £50bn “bombshell” when April brings tax deferral costs and VAT rises alongside the end of the business rates holiday, furlough and other support packages. The party has called for 100% business rates relief for retail, hospitality and leisure businesses to be extended for at least a further six months, for the government to maintain the reduced rate of VAT for those in the hospitality sector and for the furlough scheme to be extended. Shadow minister Lucy Powell urged ministers this morning to deal with the issue now, as businesses need to make plans.

Sound familiar? It echoes the attack aimed at Rishi Sunak throughout the pandemic – specifically, that the Chancellor has repeatedly lurched from one last-minute decisions to the next on economic support in the crisis, leaving employers in the lurch and causing higher unemployment. As the TUC pointed out recently, unemployment has surged when furlough is under threat or being wound down. Office for National Statistics figures last month showed that when the job retention scheme was scheduled to end completely on October 31st last year, unemployment rose sharply to 5%.

As part of National Apprenticeship Week, Kate Green will visit (virtually) a provider in the East Midlands today. Ahead of the trip, the party reiterated its call – bolstering demands from the unions – for unspent money sitting in the apprenticeship levy fund to be used to boost opportunities for young people. With data showing apprenticeship numbers tumbling, Labour has proposed that the government use a wage subsidy instead of their failing cash incentive announced earlier this year. Under the opposition’s plans, the state would provide a full wage subsidy for an apprentice’s first three months, a 50% wage subsidy for six months and subsidy of 25% for the final three months.

Voting in the Scottish Labour leadership election begins today. Contenders Monica Lennon and Anas Sarwar met last night in a televised hustings and clashed over a second independence referendum. Both are against independence but Lennon said she would not oppose indyref2 “if there is a pro-independence majority”, while Sarwar argued it was not “credible” to head into a second vote straight from the Covid crisis. Polls in the leadership contest will remain open until February 26th, with the result due on the 27th.

In parliament today, Matt Hancock will face MPs to announce a minor adjustment to Covid border policy – requiring travellers to take two tests during their self-isolation. The Health Secretary will also give an update on the hotel quarantining policy, which is due to start next week despite Downing Street confirming yesterday that no deals had been struck with any hotels. Also back in the Commons is the controversial trade bill. The government could see a major rebellion as MPs consider the ‘genocide amendment’. Labour Campaign for Human Rights’ Aladdin Benali has penned this piece for LabourList on why the amendment is of “exceptional importance”. Sign up to LabourList’s morning email for everything Labour, every weekday morning.

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