Johnson’s Jobs Squeeze to hit struggling sectors as government begins severing furlough support
Employers desperate to retain staff and protect jobs, but in sectors still prevented from reopening their businesses by lockdown rules, are faced with having to make a choice between letting go of staff or paying to keep them, Shadow Business Secretary Ed Miliband MP warned today.
Employers in sectors still unable to open including night clubs and soft play centres are being hit with a bill running in the tens of millions, as all employers must now pay towards the cost of furloughed staff.
Employers are being forced to pay approximately £550 per employee on furlough over the course of the next three months, on average, with the bill adding up for those sectors still fully or partially closed.
While some sectors have been open for months and are trading well, businesses such as indoor play centres and night clubs are still in the dark with no date yet set for their reopening. Many other businesses in the hospitality and wedding sectors are still struggling to break even as they slowly emerge from lockdown.
New analysis from Labour has revealed that, based on average figures, the new employer wage contributions mean:
- The night time economy has 520,000 workers on furlough, with many venues including night clubs and live entertainment venues having to remain shut and many pubs, bars and restaurants under financial pressure. The sector as a whole is facing a bill of around £285 million just to keep their staff on the books over the next 3 months.
- Indoor play centres and soft play areas, which do not yet have a reopening date, will have to take a hit of almost £10 million over three months to pay for the 18,000 staff on furlough.
- The exhibition, trade show and events sector will have to pay almost £22 million in wage contributions to keep the 40,000 workers currently furloughed.
With the country facing the deepest recession in 300 years and the government pursuing a one-size-fits-all withdrawal of furlough, the Shadow Business Secretary is warning ministers it is far from ‘job done’ on furlough, with hundreds of thousands of jobs still very much at risk.
Failure to make government support for businesses more targeted and focused would be a historic mistake, driving up unemployment in this country, and costing hardworking businesses and people their livelihoods.
Ed Miliband MP, Shadow Secretary of State for Business, Energy and Industrial Strategy, said:
“Many businesses still have little or no cash coming in, but are trying to do the right thing and save their employees’ jobs.
“They now face the stark choice of letting go of their staff or facing a hefty financial burden to keep them on.
“Businesses in vastly different sectors and circumstances should not be treated in this uniform way, and it is clearly unfair and illogical for those employers still locked down and unable to trade.
“Unless Ministers recognise the scale of the jobs crisis and change course they will force employers to make cuts, and be culpable for thousands of workers across the country losing their jobs and livelihoods.”
Labour is calling on the Government to end their damaging blanket approach to ending furlough support before it is too late, and to target support at the hardest hit sectors. This would encourage businesses to stick with workers and not make them redundant now, which is inevitable unless government changes course.
Labour analysis finds “perfect storm” of rising childcare costs and risk of childcare providers closing
The Labour Party says a “perfect storm” of rising childcare costs and thousands of providers at risk of closure due to a lack of government support will make it impossible for many parents to return to work.
New analysis by Labour has found that childcare costs have risen between two and a half and three times as fast as wages since the Conservatives came into office in 2010.
Analysis of data from the Early Years Alliance has found that there are nearly 19,000 childcare providers in England that are at risk of closing in the next year.
The Early Years Alliance found that 25% of childcare settings felt it was somewhat or very unlikely that they would be open in 12 months time, meaning nearly 19,000 of England’s 75,000 childcare settings are now at risk of closure.
The sector has repeatedly raised concerns that long-term underfunding from government, and a lack of targeted support during the coronavirus pandemic, will make it impossible for many providers to remain viable.
Childcare has repeatedly been neglected by the Government in its response to the crisis. The Chancellor did not mention the sector during his economic update, and the Prime Minister did not mention it when outlining initial plans to reopen the education system. Parents were also ordered back to the office by the Prime Minister without being given any additional support to access the childcare they need to return to work.
Many families will struggle to access support over the summer, with Labour analysis revealing that spending on children’s services has been cut by hundreds of millions of pounds in real terms since 2010.
There will be further costs or challenges in accessing childcare if families cannot turn to the informal childcare provided by grandparents. A survey by the Department for Education found that over one in four children aged 0-4 used childcare provided by grandparents. Without this support available families will find themselves needing to find and pay for additional support.
Despite some expansions of free and subsidised childcare for two, three and four year olds, many of the most disadvantaged children will not be able to access much of this support. There is significantly less support available for children of school age, which will create particular challenges for parents who need to access childcare over the summer.
Kate Green MP, Labour’s Shadow Education Secretary, said:
“The Conservatives have created a perfect storm for working parents across the country, with a crisis in the childcare sector locking children out of early education and making it impossible for many parents to return to work.
“Ordering parents back to work without allowing them to access the childcare they need is a stark reminder that Boris Johnson is completely out of touch with the needs of working families.
“The Government must urgently provide targeted support to the childcare sector, and ensure that parents can access the childcare that they need.”
Labour condemns lack of summer support for children as PM orders millions of parents back to the office
Labour condemns lack of summer support for children as PM orders millions of parents back to the office
Keir Starmer has said that the Prime Minister is putting parents in an “impossible position” by urging a return to offices over the summer while failing to provide adequate support for childcare, holiday activities or catch-up schemes.
Labour claims the Government is “penalising parents” by announcing a return to offices during the height of the school holiday period without any additional support for families.
The intervention comes amid widespread frustration from parents at the government’s handling of education. Last week, a survey by Parentkind revealed seven in ten parents think the Government has handled the issue poorly during the pandemic.
Despite millions of children experiencing school closures, the government has not announced any additional funding for summer programmes since the onset of the pandemic. A £9 million holiday fund announced in January will support 50,000 children, meaning just 0.5% of schoolchildren will receive support through the scheme. Meanwhile, many commercial summer activity providers have cancelled all their 2020 programmes.
Last week, Labour called for targeted support for the struggling childcare sector to prevent a wave of nursery closures. Thousands of childcare providers have closed in the last five years, with thousands more believing that they will not be able to remain open this year.
Keir Starmer, Leader of the Labour Party, said:
“We all want society to get moving again, but it requires a clear plan and national leadership from the government. Despite ordering millions of parents back to the office, the Prime Minister has refused to provide any extra help for families, penalising parents by putting them in an impossible position.
“Parents got a back-to-work notice on Friday just as the summer holidays began. But they got no support for structured activities, no summer catch-up schemes, and no support for a childcare sector on its knees.
“If we are going to reopen our society and economy safely and successfully, we need the public to have confidence in the government’s advice, we need test, track and trace to be working properly, and we need proper support for children to learn and for parents to get back to work.”
Government must release better data to help councils combat coronavirus
Labour is calling on the Government to release more information to local authorities which they say will be of “vital assistance” in containing local spread of coronavirus in future.
The letter from Shadow Health Minister Justin Madders to Baroness Harding, who leads the Government’s testing and tracing programme, sets out a series of requests on testing data that they say is needed in local areas.
Justin Madders MP, Labour’s Shadow Health Minister, said:
“Councils are getting testing data which is sometimes nearly a fortnight old and has such little information in it that it is virtually useless in being able to spot and stop local outbreaks.
“We are asking that positive test results are given to councils on a daily basis, in real time if possible, and that there should be sufficient information for them to be able to identify the workplace if possible, where an outbreak has occurred.
“The Government needs to be much more open and transparent with local councils so that together we can catch local outbreaks earlier and stop transmission of the virus.”
Starmer: Economic recovery must be built on “solid foundations” after lost decade of Tory inaction
Keir Starmer has urged the Prime Minister to deliver an economic recovery built on ‘solid foundations’ after a lost decade of inaction and broken promises under the Conservatives.
Ahead of the Prime Minister’s speech on Tuesday, the Labour leader has warned that the country cannot afford to repeat the mistakes of the past ten years.
Starmer cites the Tories’ 2015 ‘Starter Homes’ initiative that promised 200,000 affordable homes but failed to produce a single property.
The warning comes as new analysis by Labour reveals that under the Tories:
- The rate of home ownership has fallen, and almost 800,000 fewer households under 45 own their own home now compared to in 2010.
- Seven of England’s nine regions saw a reduction in public capital investment per person over the past ten years.
- In some parts of the country, including Yorkshire, East Midlands and the South West, investment per person is still less than half that seen in London.
- All regions have seen a decrease in both health and education investment per person.
- Average wages last year were still lower than they were in 2010 across England.
Keir Starmer has urged the Prime Minister to plot a route to recovery that works for the whole of Britain.
Speaking ahead of the Prime Minister’s speech, Keir Starmer said:
“For much of the country, the Tories’ record on building and investment has been a lost decade.
“Much-hyped plans such as the Starter Homes initiative – which built zero houses despite having £2.3 billion allocated to it – barely even made it beyond the press release. It’s been talk, talk, talk rather than build, build, build.
“Our recovery from the coronavirus crisis needs to match the scale of the challenge. It must be built on solid foundations. It has to work for the whole country and end the deep injustices across the country.
“We are on the cusp of one of the biggest economic crises we have ever seen. The Government must immediately prioritise protecting people’s lives and livelihoods. That’s why Labour has called for a ‘Back to Work’ Budget that has a laser-like focus on one thing – jobs, jobs, jobs.”