MPs call for U-turn on targeted furlough extension to avoid jobs disaster
MPs are calling on the government to change course and offer targeted extensions to the furlough scheme to save sectors such as theatre facing "total collapse" as a result of not being able to resume business.
In a House of Commons debate, Labour demanded the government reverse its decision to end the existing wage support schemes next month across the board and extend help for workers in the areas of the economy that have been hardest hit by the coronavirus crisis.
Shadow chancellor Anneliese Dodds said targeted support "could be the difference between survival and going under", criticising chancellor Rishi Sunak for "stubbornly insisting on treating every part of the economy as if it is in the exact same situation, and in doing so putting the recovery and millions of livelihoods at risk".
In the arts and entertainment sector, 51% of businesses still have employees on furlough, compared to an average of 13%.
Theatres have long warned the abrupt removal of the Coronavirus Job Retention Scheme in October, before the vast majority have been able to start work again, will lead to mass redundancies and irreparable damage to the UK’s cultural industries.
Dodds said: "We have huge numbers of people who work in sectors that are still not back to business as usual, despite their critical importance for our economic future, whether we’re talking about highly skilled workers in manufacturing, or the creative industries.
"Yet the chancellor is ploughing ahead with the one-size-fits-all withdrawal of support schemes, pulling the rug from under thousands of businesses and millions of workers all at the same time, irrespective of the situation."
She said the end of the furlough scheme and Self-Employment Income Support Scheme was being done "without any analysis of the impact" on unemployment or the economy, while the government should be communicating more with industry, trade unions and stakeholders about how to offer the best support.
"They don’t want a handout, they just want a fair chance," Dodds said.
Her comments were echoed by Labour MP Shabana Mahmood, who said government should take responsibility for sectors such as theatre that are unable to open because of Covid-19 restrictions imposed by Westminster.
"It is unconscionable that economic support does not follow where public health rules lead us," she said.
Mahmood, whose constituency includes major theatres and arts organisations in central Birmingham, said the arts are "crucial to my area and the social, cultural and economic life of Birmingham" but are struggling because they cannot get back up and running like other sectors.
"The cost of supporting jobs and sectors facing total collapse because those businesses are going to go to the wall will be cheaper than the cost of inaction.
"It will be much more expensive in the long run. The government’s current approach not only makes no economic sense, but it also fails the test of fairness," she said.
Conservative MP Stephen Crabb said key areas of UK life must emerge from the crisis without being irreparably damaged.
"I think about all of those padlocked theatres a short walk from here in the West End, and every city centre up and down the country. We want to protect key parts of our economy and national life, and I urge ministers to keep an open mind about how we do that," he said.
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Taiwo Owatemi, Labour MP for Coventry North West, said the country was "unprepared for the impending disaster awaiting people when the furlough scheme" ends, and that the initiative is "masking the true extend of the unemployment crisis", while Green MP Caroline Lucas said the government’s approach so far has resulted in a "huge injustice being done to the self-employed".
"Government should take its fingers out of its ears and start listening to the self-employed," she said.
Others also warned of the number of people in sectors such as theatre who have fallen through the gaps of both schemes.
Responding, chief secretary to the Treasury Steve Barclay said MPs should be reminded of the severity of the economic challenge, which has hit "on a speed and scale we have never seen before".
"An economic crisis on this scale means that whatever the government does, jobs will be lost, businesses will close," he said, adding: "Hard times are here".
He claimed the government has acted "decisively" from the outset during the pandemic, "with one of the most generous support packages anywhere in the world".
He also announced that government would provide cash grants to businesses that have been ordered to close.
Those with a rateable value of £51,000 or less will receive £1,000 for every three weeks of closure, and those worth more than £51,000 will be given £1,500 for every three weeks.
The Incorporated Society of Musicians, one of many creative sector bodies that has been lobbying for an extension of support for the arts, said it was "pleased politicians are listening to calls from across many industries and debating the need for targeted income support for self-employed people in sectors of the economy that have been hit hardest by the coronavirus".
Chief executive Deborah Annette said the crisis had devastated the music profession, adding: "That is why more than 120 organisations from across the creative industries called on the government to provide a tailored financial scheme for our self-employed workforce until venues can safely and fully reopen. If they do not support the lifeblood of the performing arts, then we are looking at an exodus of highly skilled talent."
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