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Labour urge Rishi Sunak to reconsider ‘historic mistake’ to phase out furlough scheme as it launches major ‘fight for jobs’

Labour said phasing out the furlough scheme would “hand P45 notices to workers across the country” (PA)

3 min read

Labour has warned the Chancellor that he has “24 hours to save British jobs” and reverse plans to phase out the furlough scheme.

The call comes as Labour launches a new 'Jobs, Jobs, Jobs' campaign calling on the Government to support jobs as businesses continue to feel the effects of the pandemic.

From 1 August, employers will have to start paying National Insurance and pension contributions for furloughed employees on their payroll, as part of the Treasury’s plan to gradually withdraw the scheme.

But the opposition have branded this “a historic mistake”, claiming it will “hand P45 notices to workers across the country”.

Shadow Chancellor Anneliese Dodds has now accused Rishi Sunak of having “failed to match up to the scale of the crisis” while setting out her party’s five-point “fight for jobs” plan.

Ms Dodds said: “The Chancellor’s refusal to abandon his one-size-fits-all withdrawal of furlough is a historic mistake that risks a python-like squeeze on jobs in the worst-hit sectors. The reward for months of hard work and sacrifice by the British people cannot be a P45. 

“It’s not too late for the Chancellor to see sense, change course and support the businesses and sectors that need it most. But even if he does, there is still much to do."

She added: “That’s why Labour is today launching the Jobs Jobs Jobs campaign – to offer concrete, constructive proposals that would protect the economy and people’s livelihoods. 

“The government should back viable businesses that are still impacted by Coronavirus, support the self-employed and come up with a plan to drive job creation as we emerge from the pandemic.

“And it must ensure our NHS and care services are fully prepared for a second wave – because we won’t recover from this economic crisis until the government gets a grip on the health crisis.”

Measures proposed by the campaign include reforming the job retention scheme to support the worst-hit sectors; setting up a £1.7bn fund to prevent companies from closing; providing extra support for areas forced into local lockdowns; and a boost to workers' rights.

Labour also calls for extra spending on infrastructure to help create jobs, reskill workers and accelerate progress towards the country’s net-zero targets.

Earlier this month, the Chancellor set out his own ‘Plan for Jobs’ with his Summer Economic Update in the Commons.

Combined with infrastructure spending announced the week before, the Government announced around £30billion of new spending to aid Britain’s economic recovery.

New initiatives included a bonus for companies who kept on furloughed staff, the Kickstart Scheme which would see the Treasury pay for six-month placements for young people, and the ‘Eat Out to Help Out’ discount scheme which reduced the price of restaurant meals.

The Treasury has been contacted for comment.

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