Rishi Sunak must maintain furlough scheme to avoid "deep economic crisis"
12 May 2020, 15:02 | Updated: 15 June 2020, 15:26
Rishi Sunak must save UK from slipping into "deep economic crisis"
The Chancellor's furlough support for employees will shape how the UK can fight a potential economic crisis after coronavirus.
The revelations of the Shadow Exchequer Secretary to the Treasury Wes Streeting came as he joined Shelagh Forgarty to give the opposition's reaction to Chancellor of the Exchequer, Rishi Sunak's announcement on the extension of the furlough scheme.
Mr Streeting told Shelagh that Labour have been calling for an extension to the scheme for some time so to see their requests taken into account is welcome, but some changes are quite far away.
"Some of the flexibility we've called for is coming, but not until August" the Labour MP said. He added that the new policy of asking businesses to foot the bill of paying employees when it comes to August will have to be looked at on a case by case basis. "He's got to be very careful of how he asks that" Mr Streeting insisted.
"We don't want there to be an unemployment crisis off the back of a public health crisis." Shelagh added to this point sympathising with an employer that may have to think about redundancies because of an inability to pay for staff. She asked the Shadow Exchequer Secretary "what can be put in place to stop that happening."
Mr Streeting called for Mr Sunak to "make clear exemptions and exclusions for companies that cannot do it" using the example of the hospitality sector, who would have next to no income between now and August. The Labour MP told Shelagh in this case this sector should continue to have full support from the government.
He warned LBC that if the Chancellor isn't careful about how the furlough scheme is updated as we ease out of the coronavirus crisis, the "impact of Covid on the economy will make unemployment a feature of the economy more than it was a decade ago."
Shelagh prodded the MP, arguing that this support cannot go on forever. Mr Streeting replied by insisting the UK take a wartime reaction to the process. "government has to do things normally unthinkable in peacetime" he said, adding that "there is enormous confidence in the institutions of the UK" and this should be taken advantage of while supporting furloughed workers.
Should the UK ease furlough on workers who need it most, "the Chancellor risks making more people unemployed" and the government then is faced with "making a public health crisis a deep economic crisis."
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