I sat and listened to the Chancellor’s latest statement in hope and anticipation of an updated economic package that will protect jobs and livelihoods in Putney, Roehampton and Southfields as the effect of this virus continues. It never arrived.
The Chancellor’s latest statement does not rise to the scale of the jobs crisis, does nothing for sectors that cannot effectively open, only offers a part time wage subsidy which may be inadequate for many firms and not enough action on job creation. The Chancellor is consigning whole sectors of the economy, which generate billions in tax revenue and employ more than a million workers, to the scrap heap.
He failed to mention businesses that are not able to operate, because they are either shut down completely or trading with hugely reduced capacity including: the wedding industry, events and exhibitions, major parts of the night-time economy, festivals, sports venues and theatres. There was no acknowledgement at all about their plight or the fact that they may be forced to remain fully or mainly closed for the next six months. The vast majority of these jobs are perfectly viable in the long term, and essential for building back in the future, and so deserve support from government during the period of pandemic restrictions.
New analysis by the Labour Party, using Office of National Statistics employment data, shows that more than a million workers are in these sectors simply dismissed as “unviable” by the government. None of the additional measures announced by the Chancellor last week will assist them.
There are 13,000 self-employed individuals in my constituency so I was deeply concerned at his announcements on the SEISS scheme. While I welcome the extension of the scheme, those who were excluded first time around remain excluded – up to 3 million tax payers up and down the country. Even for those who qualified for the scheme, the past six months have been incredibly difficult and business has simply not picked up, so the drop to 20% of earnings will have a devastating impact.
As for jobs, myself and my Labour colleagues unequivocally supported a targeted extension of the Furlough scheme, so I was incredibly disappointed that this was not extended. 30% of eligible employees in Putney have been furloughed, and the claimant count for Universal Credit has more than doubled since March. I have grave doubts over the ability of the new proposals to save jobs.
The government’s Job Support Scheme is only open to those employers who offer their employees at least a third of their usual hours – impossible for those industries still closed. The scheme is also fundamentally flawed because, for every two members of staff, it is cheaper for a company to bring back one member of staff full-time and fire the other, than to have two workers working part time.
Schemes in other countries have been successful when there have been appropriate levels of financial incentives for businesses to retain workers in viable jobs, for example the German kurzabeit. In contrast, Sunak’s scheme does not provide businesses with adequate support- this could lead to a cliff-edge of redundancies when the Job Retention Bonus expires in January.
Labour’s proposal for a Job Recovery Scheme would address that – the scheme would incentivise targeted businesses to bring back more workers part-time, instead of bringing some back full time and letting others go. Labour’s proposal would also go further than the government’s new scheme, including a training component to ensure that workers can use the time from their reduced hours to gain vital new skills; more conditionality to better target public money; and targeting to specific sectors
The Chancellor failed to mention whether local authority discretionary grants would be extended, writing off one option for supporting businesses still locked down or struggling.
As your MP I will keep standing up for local people and trying to persuade the Chancellor to change his mind and support the Shadow Treasury team in doing this. I am a member of the Excluded APPG which represents all the people left out of financial support, and I will remain engaged with their work. I have recently written to the Chancellor asking him to implement their recommendations for the self-employed. You can read my letter here: https://www.fleuranderson.co.uk/2020/07/28/fleurs-letter-to-the-chancellor-on-the-continued-lack-of-support-for-freelancers-and-small-limited-company-directors/
Rest assured I will continue to fight for you in whatever way I can.