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Sunak's new scheme for furloughed workers won't prevent job losses and poverty

Unions and Labour MPs say government ministers ‘still need to do more to stop the devastation of mass unemployment’

CHANCELLOR Rishi Sunak’s new scheme to pay workers at firms shut down by Covid-19 restrictions two-thirds of their wages has arrived too late to prevent mass redundancies and poverty, critics have warned.

Opposition parties and trade unions said that Mr Sunak’s expansion of the new Job Support Scheme (JSS) falls short of the furlough scheme that it replaces from November 1.

Ministers are expected to outline a three-tier local lockdown system on Monday, which could lead hospitality businesses in coronavirus “hotspots” to be shut temporarily.

Firms whose premises are legally required to close because of restrictions will receive grants to pay the wages of staff who cannot work. The government would be paying two-thirds of each employee’s salary (67 per cent) up to a maximum of £2,100 per month.

The JSS was originally intended to subsidise some wages in firms that can only take employees in “viable jobs” back on a part-time basis — working at least one-third of their normal hours but receiving at least 77 per cent of their pay.

Employers are not required to contribute towards wages, but must cover National Insurance and pension contributions.

Employers will now also be able to claim the JSS payments when their firms are subject to restrictions and employees are off work for at least seven consecutive days. 

Mr Sunak said he hopes that it provides “a reassurance and a safety net for people and businesses in advance of what may be a difficult winter.”

The original furlough scheme introduced in April had paid 80 per cent of wages capped at £2,500 a month before payments tapered.

The new JSS plan is more generous to employers than the tapered furlough scheme as, under the latter, bosses have had to top up employees’ wages as well as pay National Insurance and pension contributions from September.

But mass redundancies have already been announced ahead of the tapered furlough scheme’s last day on October 31, with fears that more job losses will be announced over the coming weeks.

Shadow chancellor Anneliese Dodds said that Mr Sunak’s delay in delivering support had caused “unnecessary anxiety and job losses.”

“None of this was inevitable if the Chancellor had just taken his fingers out of his ears and listened to the warnings from Labour and others,” she said.

“Businesses and families don’t have the luxury of going at Rishi Sunak’s pace when millions of jobs and livelihoods are on the line.”

TUC general secretary Frances O’Grady said: “Ministers still need to do more to stop the devastation of mass unemployment.

“Firms which aren’t required to close but will still be hit by stricter local restrictions need a more generous short-time working scheme and there needs to be extra help for self-employed people in local lockdown areas too.

“Nationally, industries like the arts, hospitality, retail and aviation face a long, tough winter. These sectors need targeted help.”

Transport Salaried Staffs’ Association general secretary Manuel Cortes said: “We desperately need support for our travel industry, which has effectively been put into lockdown as an entire sector.

“A minister for the travel industry must be established urgently to guide and champion this important part of the economy. 

“We have called for targeted support from the outset for good reason. It’s appalling that the government has taken so long to listen, with countless jobs lost and yet more to come.” 

GMB acting general secretary John Phillips said that Mr Sunak’s plan would “effectively push workers below the minimum wage.

“In workplaces now forced to close, the imposition of an effective 33 per cent pay cut will leave many without enough to live on and pay the bills, given how low wages were in the first place,” he said.

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