U.K. Faces ‘Python-Like’ Jobs Squeeze Post-Furlough, Labour Says
U.K. Faces ‘Python-Like’ Jobs Squeeze Post-Furlough, Labour Says
(Bloomberg) -- Boris Johnson’s government risks triggering a wave of job losses as it unwinds a furlough program that has supported millions of U.K. workers through the coronavius pandemic and lockdown, the opposition Labour Party said.
Footfall in high streets shops is still down 40% on pre-pandemic levels, and 43% of businesses in some industries are still closed, Labour said in a statement. Chancellor of the Exchequer Rishi Sunak should extend support for employee wages beyond the end of October in the worst-hit parts of the economy, the party said.
“The chancellor’s refusal to abandon his one-size-fits-all withdrawal of furlough is a historic mistake that risks a python-like squeeze on jobs in the worst-hit sectors,” Sunak’s Labour counterpart, Anneliese Dodds, said in the statement. “The reward for months of hard work and sacrifice by the British people cannot be” losing their jobs, she said.
Sunak has faced repeated warnings that his plan to start winding down the furlough program from Saturday risks triggering a wave of job losses and causing permanent scarring to the economy. The “premature” withdrawal of support will push unemployment above 3 million before the end of 2020, the National Institute of Economic and Social Research said this week.
The government has supported 9.5 million jobs under the furlough program at a cost of almost 32 billion pounds ($42 billion) to date by paying 80% of private-sector wages.
From Saturday, employers will begin to bear some of the cost by taking on pension contributions and national insurance payments for furloughed employees. From September, they will pay 10% of wages, and the following month they will pay 20%, before the program is brought to an end on Oct. 31.
Labour argues wage support should be extended for both the worst-hit sectors and for areas forced back into local lockdown to stamp out upticks in the virus. Dodds and party Leader Keir Starmer will launch a campaign on Friday aimed at protecting jobs, calling on the government to set up a 1.7 billion-pound fund to prevent high-street firms from going under.
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