Great Britain

Coronavirus: One million workers ‘heading for scrap heap’ as chancellor supports only ‘viable’ jobs, Labour warns

More than a million jobs are in jeopardy in sectors that will remain largely shut down as the pandemic worsens, Labour is warning.

The party has used official statistics to reveal the number of workers likely to miss out on Treasury help after the chancellor Rishi Sunak said he would “support viable jobs” only.

Only staff able to work at least one-third of their normal hours will receive wage top-ups – which is “impossible” for entertainment and hospitality industries, Labour protested.

The jobs in danger are in the night life sector (497,000), the sports industry (369,000), events and conferences (171,000), and creative, arts and entertainment (90,000), the party said.

“The chancellor is consigning whole sectors of our economy to the scrap heap, damaging lives and livelihoods, and threatening the recovery,” said Lucy Powell, its business spokeswoman.

“Labour has called for the government to come forward with an effective plan to recover jobs, retrain workers and rebuild businesses. This isn’t it.

“Even for those who can access it, the job support scheme is badly designed and could lead to a wave of job losses, because the chancellor’s sums do not add up for businesses. He must think again.”

The last criticism reflects the calculation that firms will be better off employing a single worker full-time than two workers part-time – something dismissed by the Treasury.

In his emergency statement last week, Mr Sunak announced that the government would help pay for workers’ reduced hours, although most of the burden will fall on their employers.

It follows the abandonment of the furlough scheme, hailed as successful in avoiding an immediate unemployment surge – but, at £40bn, deemed too expensive.

The chancellor told MPs: “It will support viable jobs. To make sure of that, employees must work at least a third of their normal hours and be paid for that work as normal by their employer.”

And he rebuffed criticism by saying: “It is better that our support is targeted and focused on supporting viable jobs in our economy – and that means a new approach.”

But Labour said a survey for the Night Time Industries Association, representing 1,200 bars, clubs, casinos and music venues, found that 80 per cent were planning to lay off staff when the furlough scheme ends.

It is the UK's fifth-biggest industry, accounting for at least 8 per cent of the UK's employment and annual revenues of £66bn.

In addition, Labour said an estimated 500,000 people work in the wedding industry and its supply chains, which was facing huge restrictions with guests limited to 15.

Mr Sunak has admitted the jobless count will soar by the end of the year. The Bank of England believes it will peak at 7.5 per cent, but most economists believe it will be much higher.

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