Labour calls for urgent Government action to stop coronavirus 'jobs bonfire'

9 August 2020, 12:29

The pandemic has led to a jobs bloodbath in recent weeks
The pandemic has led to a jobs bloodbath in recent weeks. Picture: PA

By Ewan Somerville

Labour is calling on the Government to put out a “jobs bonfire” by giving targeted assistance to industries and businesses still shut down by the coronavirus pandemic.

Shadow business minister Lucy Powell said it is “clearly illogical and unfair” to prevent firms reopening while winding up the furlough scheme supporting jobs.

The last-minute decision to halt the planned reopening of bowling alleys, casinos and beauty salons for another fortnight amid fears of a second spike in coronavirus, put extra strain on already struggling industries, industry leaders warn.

Meanwhile, nearly 1,800 UK companies told the Government of plans to cut 20 or more jobs in June as the coronavirus wreaked havoc on the country's economy, figures suggest.

Ms Powell called for the Government to “urgently rethink their rigid approach”, which will see the furlough scheme end entirely in October.

“The unpredictable nature of this virus means that public health measures must be flexible and responsive, but it surely follows that economic measures must be the same,” the Labour MP said.

“It's clearly illogical and unfair to prevent businesses from opening their doors, cutting them off from any income, and to cut their furlough lifeline at the same time.

“They've said they can't save every job, but we're seeing a jobs bonfire. They need to target their support at the hardest-hit sectors or be responsible for another wave of mass redundancies.”

Casinos spent around £6 million preparing to open on 1 August by taking staff off furlough and spending money on security and supplies, according to the Betting and Gaming Council, and it is costing them £5 million for every week they remain closed.

Shadow business minister Lucy Powell, pictured with Labour leader Sir Keir Starmer
Shadow business minister Lucy Powell, pictured with Labour leader Sir Keir Starmer. Picture: PA

Some 1,778 companies informed the Insolvency Service of their intention to cut more than 139,000 jobs in England, Scotland and Wales in June, according to data obtained by the BBC under freedom of information laws.

This compares to 345 companies announcing a total of 24,000 job losses in June 2019.

Royal Mail, Centrica and The Restaurant Group - which owns Frankie and Benny's - were among those announcing four-digit job losses.

The furlough scheme has so far cost £33.8 billion supporting the payrolls of 9.6 million workers during the crisis.

But Chancellor Rishi Sunak has resisted growing calls to extend the scheme beyond October, when it is due to wind down, insisting it cannot continue “indefinitely”.

Doubling down on Friday, he told LBC: “This has been a difficult decision. But if you look at it from start to finish, the government will have been stepping in to pay people's wages for eight months, which in and of itself is a very long period of time.

“Most reasonable people will look at that and say this is something which cannot go on indefinitely. It's not sustainable.”