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Labour warns chancellor against making ‘historic mistake’ if he does not change tack on furlough scheme within 24 hours

CHANCELLOR Rishi Sunak will be risking an “historic mistake” if he does not change his “one-size-fits-all” decision to begin scaling back the coronavirus furlough scheme within the next 24 hours, Labour warned last night.

From today, employers will have to pay national insurance and pension contributions for the hours that an employee remains on furlough.

Labour says that thousands of workers across Britain could have their P45s handed to them by bosses unable or unwilling to pay the costs of keeping them on furlough until the scheme ends in October.

The party’s warning comes as shadow chancellor Anneliese Dodds and Labour leader Sir Keir Starmer visit a manufacturer in Peterborough today to launch a new nationwide push for “jobs, jobs, jobs.”

The campaign will call on the government to protect the livelihoods of the workers who have been most vulnerable to the economic impact of Covid-19, such as those in retail, hospitality and tourism.

Footfall at key high-street businesses is still down 40 per cent on pre-pandemic levels and 43 per cent of firms in the hardest-hit sectors still say that they are temporarily closed.

Ms Dodds will accuse the government of having “failed to match up” its efforts “to the scale of the crisis.”

Labour is urging the government to reform the furlough scheme so that it supports jobs and targets aid to the worst-hit sectors, and to create a £1.7 billion “fightback fund” to save firms and high streets.

The party’s five-point plan also calls for the provision of additional funds to areas forced into local lockdowns, support for the self-employed and those left out of existing schemes, protection for workers’ rights and sick pay, and investment in infrastructure to create jobs.

Ms Dodds said: “It’s not too late for the Chancellor to see sense, change course and support the businesses and sectors that need it most. But even if he does, there is still much to do.”

Meanwhile, Scottish Labour has warned that time is running out to save jobs north of the border as the end of the furlough scheme edges closer.

Research by the Fraser of Allander Institute found that more than half of the employers in Scotland that have furloughed workers expect to reduce their workforce when the UK government scheme comes to an end.

Director Graeme Roy wrote in the report that while economic recovery has now started, “it will be a long road ahead.

Scottish Labour leader Richard Leonard called for the implementation of a quality-jobs guarantee for workers, stressing that it is vital that the furlough scheme be extended. 

He added: “Time is running out to get a quality-jobs guarantee scheme in place before the furlough scheme ends.

“Scotland needs jobs for good, but the SNP’s failed hit-and-miss approach will mean that thousands more will join the dole queues and leave our economy more reliant than ever on insecure, low-paid work.”

The Scottish government said that it has invested to help ensure that people who have lost jobs, those at risk of unemployment and young people entering the labour market can benefit from more and better job opportunities.

SNP politicians at Westminster have also called on Mr Sunak to reverse the “dangerously premature” plan to cut back on support for workers and to extend the furlough scheme into 2021.

“Rather than abandoning firms and workers, the Treasury must heed the dire warnings and act before it’s too late,” said SNP MP Alison Thewliss.

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