Shadow Chancellor Anneliese Dodds called on Rishi Sunak 40 times to rethink his one-size-fits-all withdrawal of furlough support between 7 May and 23 September 2020. Over that same period, the Government ruled out a change 20 times.
In the intervening period, it is estimated that hundreds of thousands of people were made redundant. Statistics from the Office for National Statistics (ONS) show there were 156,000 redundancies across May, June and July – an increase of 48,000 on the previous quarter and the biggest quarterly rise since 2009. Institute for Employment Studies expects a total of 450,000 redundancies between June and September and forecasts a further 200,000 in October to December.
Some of these redundancies could have been avoided if the Government had listened to Dodds and reformed the furlough scheme before employer contributions were introduced in August and ahead of the 16 September deadline for large employers to start redundancy consultations.
Dodds was warning about the impact on the UK’s jobs crisis of the Chancellor’s inflexibility as early as 7 May. Speaking on the Today programme that day, she said:
“Unless we have a system that enables short-hours working where people can return to the workplace may be for 30 per cent, perhaps two days a week, something like that, to get businesses ready to reopen then actually we’ll see a number of them closing, unfortunately, and a much stronger impact than is necessary.”
On 39 further occasions, she pushed for the Chancellor to rethink his decision to pull furlough support in one fell swoop at the end of October – all of which have fallen on deaf ears in the Treasury.
Dodds was also one of the first to introduce the concept of a short-time working scheme. On the day it was revealed that the country was in one of the deepest recessions in Europe on 12 August, she wrote in the Telegraph:
I urge Mr Sunak to look to the examples of countries like Germany, where a permanent short-term work programme known as Kurzarbeit has been in place ever since the global financial crisis. German employers can reduce workers’ hours when times are tough instead of making them redundant – exactly the sort of innovative solution that could save many jobs here in the UK.
At the Summer Economic Update on 8 July, the Chancellor categorically ruled out the idea of any change to his plans to end the furlough scheme at the end of October on the basis that it was not in anyone’s interests, “least of all those trapped in a job that can exist only because of government subsidy”.
And just two weeks ago at Prime Minister’s Questions, Boris Johnson rejected calls from Labour leader Keir Starmer to act on the furlough scheme by saying it was keeping people out of work in “suspended animation”.
Labour analysis shows that four million UK jobs across the country were still fully furloughed by their employer in the middle of August, including over half a million in seats won by a Conservative MP for the first time at last year’s General Election.
On Monday 21 September Dodds set out Labour’s proposal to replace the Jobs Retention Scheme with a targeted and flexible Job Recovery Scheme so businesses in key sectors can bring back staff on reduced hours, with the Government backing wages for the rest of the working week.
Anneliese Dodds MP, Labour’s Shadow Chancellor, said:
“I have been warning for months and months that the Chancellor’s one-size-fits-all furlough support was a recipe for a jobs disaster this autumn. I gave the Chancellor 40 chances to u-turn on this, and 20 times his Government ruled out any change.
“I gave the Chancellor solutions too. In May I said we should be considering a flexible, short hours scheme. In August I told the Chancellor to look to countries like Germany which already have such schemes up and running. And just this week I put forward Labour’s plan for a Job Recovery Scheme that would allow businesses to bring back staff on reduced hours.
“Time and time again the Chancellor failed to listen, and now tens of thousands of people have lost their jobs. Too slow on lockdown, too slow on testing, too slow on schools – and too slow to protect jobs.”