Boris Johnson risks 'jobs squeeze' unless he scraps plans to wind down furlough

Boris Johnson will spark a ‘jobs squeeze’ unless he scraps plans to water down furlough support this weekend, Labour have warned.

Labour leader Keir Starmer called for Chancellor Rishi Sunak to make the scheme more flexible – or risk making a “historic mistake”.

From today, employers will have to pay National Insurance and pension contributions for their staff.

And in September, companies will have to pay 10% of furloughed employees’ salaries, rising to 20% in October.

Labour say this will amount to around £550 on average for each employee on furlough over the next three months.

And some firms, like night clubs and soft play centres will have to foot the bill even though they’re banned from opening under lockdown rules and have no date for reopening.

Labour analysis of official figures suggests the night-time economy – which has 520,000 workers on furlough, is facing a £285 million bill just to keep staff on the books for the next three months.

Indoor play businesses will have to take a hit of almost £10m to keep 18,000 workers on furlough.

And the exhibition, trade show and events sector will have to pay almost £22 million in wage contributions for 40,000 staff.

Labour is calling for the government to scrap plans for a blanket end to furlough support, and keep the existing rules in place for struggling industries.

During a visit to Peterborough to launch Labour’s nationwide jobs campaign, Sir Keir said: “Tomorrow the Government’s support begins to be withdrawn.

“We are really worried that is being withdrawn for all businesses and sectors at the same time when it’s clear that some businesses and sectors need more support.

“So, we are saying focus on jobs, it’s not too late to adopt a more flexible approach.

“If you end all support for all businesses in the same way we will lose jobs

“The Government doesn’t want that, I don’t want.

“But for the Government to say that this is simply too difficult isn’t good enough.”

Ed Miliband, Shadow Secretary of State for Business, Energy and Industrial Strategy, said: “Many businesses still have little or no cash coming in, but are trying to do the right thing and save their employees’ jobs. 

“They now face the stark choice of letting go of their staff or facing a hefty financial burden to keep them on.

“Businesses in vastly different sectors and circumstances should not be treated in this uniform way, and it is clearly unfair and illogical for those employers still locked down and unable to trade.”

Mr Miliband added: “Unless Ministers recognise the scale of the jobs crisis and change course they will force employers to make cuts, and be culpable for thousands of workers across the country losing their jobs and livelihoods.”

A Government source said the support being provided in the furlough scheme is “comprehensive and generous”.

They said: “This Government has worked tirelessly during this crisis to protect jobs, livelihoods and businesses.

“At every step we have acted at scale and at pace to ensure as many people as possible are supported during this difficult time.

“The furlough scheme is unprecedented and has so far supported the wages of 9.5 million people, at a cost of £31.7 billion and will run for eight months in total.

“It is not a ‘one-size-fits-all’ policy, it is the most comprehensive and generous version of support that can be provided.”


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