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Tue, 22 September 2020

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Labour calls for public spending watchdog probe into Rishi Sunak's job retention bonus scheme

Labour calls for public spending watchdog probe into Rishi Sunak's job retention bonus scheme

Labour have called for the probe into how the retention scheme will work (PA)

2 min read

Labour has called for a probe by the public spending watchdog into Rishi Sunak's job retention bonus scheme.

Bridget Phillipson, Labour's shadow chief secretary to the Treasury, has written to the National Audit Office over concerns the new job retention bonus is "poorly targeted and wasteful".

The scheme, announced by Chancellor Rishi Sunak last week, offers firms a one-off £1,000 bonus for each furloughed employee kept in their job until 31 January 2021.

Facing questions after the launch of the scheme, Mr Sunak insisted the move, which could cost up to £9.4bn if every furloughed employee was brought back, would "serve as a significant incentive" to preserve jobs.

But Labour have warned the scheme risks "handing over billions" to firms which were already planning to bring their furloughed staff back to work.

In a letter to Gareth Davies, the head of the National Audit Office, Ms Phillipson said the scheme could prove a "wasteful opportunity" if the funds are "poorly targeted".

"Labour is very concerned that the Chancellor's Job Retention Bonus risks handing over billions to businesses that were already planning to bring their workers back from furlough," she wrote.

"Labour accepts that no scheme can be perfect, but a poorly targeted and wasteful scheme is a missed opportunity. That's why the NAO should investigate.

"With payroll employment down almost 650,000 since March, the need to target government support where it's needed most couldn't be clearer."

The Treasury has been approached for comment.

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