Coronavirus: Job support scheme puts close to one million roles at risk, Labour says

The expansion of the government’s job support scheme will put close to one million roles at risk and is like throwing whole sections of the economy on the “scrapheap”, Labour has said.

The shadow business secretary, Ed Miliband, also said fewer than one in 15 jobs in shut-down businesses stand to benefit from the move.

Mr Miliband added that workers in sectors such as weddings, cinemas and events and conferences, which are not “legally closed” but have been forced to “shut in all but name”, will not enjoy protections from the programme.

The government has announced employees off work for more than seven consecutive days because their workplace was legally required to close due to local or national restrictions will get two-thirds of their salaries covered, up to £2,100 per month.

The scheme will be in place for six months from 1 November.

Labour said there was a “massive hole in the new safety net” because businesses “shut in all but name” due to the restrictions employed hundreds of thousands of workers in sports clubs, events and conferences, cinemas, the wedding industry as well as live music venues and theatres.

The opposition party said reduced capacity, less trade and strict public health measures mean many businesses will be severely restricted and essentially closed without meeting the threshold of being “legally required” to shut, as will many suppliers who face a knock-on hit.

Mr Miliband said ministers should “urgently rethink their damaging sink-or-swim approach which consigns whole sectors of our economy to the scrapheap”.

He said: “The government has been forced into a climbdown about the principle of supporting shut-down, so-called ‘unviable’ businesses and jobs.

“But there are massive holes in the new safety net.

“Businesses including weddings, theatres, cinemas, events, and many suppliers will still be left out on a technicality.

“They are not legally closed but they’ve been forced to shut in all but name.”

Labour said of more than one million jobs in severely restricted sectors, just over 73,000 people – those working in nightclubs, or in theatre and live music in Scotland and Wales – stood to benefit from the extension, equivalent to fewer than one in 15 jobs.

A Treasury spokesman said: “We do not recognise these figures.

“The expanded job support scheme is designed to support jobs where businesses are legally required to close – so the number of people that benefit from this scheme will obviously depend on the path of the virus and the restrictions we need to put in place.

“In addition, this incorrectly lists some sectors as not benefitting from the scheme when they will.

“It is also incorrect to suggest that those who aren’t fully closed will not get any help. Companies that are open can use the other element of the job support scheme which is aimed at those able to open but at lower levels of demand.

“And of course they can also access the other help we have made available, including billions of pounds of grants, loans and tax cuts.”

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The government intends for those employed by business conferences, exhibition centres, and sports stadia unable to reopen will be covered by the expanded scheme, with further details to be set out soon, it is understood.

Labour shadow chancellor Anneliese Dodds said the scheme needs to include a training element so workers can “develop their skills and prepare for the future”, adding it should be “targeted so that those sectors hardest hit by the virus, and which will be critical to our economic recovery, are supported, not just those which have been closed. This virus is having a much broader impact”.

She told the Co-operative Party online conference on Saturday that re-training schemes for workers needed to be implemented right away, saying the “vast majority of what the government has announced on training does not kick in until next April”.

The Labour and Co-operative MP for Oxford East went on: “Overall all of the government measures taken together to support those people who’ve become unemployed will just be helping one in five of those the government itself expects will be out of work by the end of this year.”

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