Coronavirus: Ex-PM urges Rishi Sunak to reconsider jobs support with thousands still at risk

  • Video report by ITV News Correspondent Richard Pallot

A former prime minister and chancellor has urged Rishi Sunak to reconsider his latest coronavirus financial support package amid concern that hundreds of thousands of jobs are still at risk.

Gordon Brown, who was Tony Blair's chancellor for 10 years before becoming PM, suggested the Coronavirus Job Support Scheme could encourage employers to cut staff numbers.

Indicating Chancellor Sunak may have regretted elements of his strategy announced on Thursday, Mr Brown said. "I suspect he knows himself this morning that he is going to have to change his measures."

The chancellor announced the support scheme - financial help designed to replace the furlough scheme which ends next month - but workers in sectors such as hospitality, retail, tourism and events feel they've been allowed to slip through the cracks.

Mr Brown claimed there was nothing in Mr Sunak's message for the unemployed, those who are on universal credit and looking for employment, or young people who are outside of education and do not have a job.

He told ITV's Good Morning Britain: "He (Mr Sunak) did something for part-time work, but is only paying 22% of the wages. It will be cheaper, I am afraid, for an employer to keep a full-time person on than to keep two part-time people on."

"I think he needs to come back with a better budget for jobs, Mr Brown added.

The new package is much less generous than furlough - which paid the wages of more than 8.9 million people - and will only support people who are in "viable" jobs.

Mr Sunak, when announcing the support, said it would "fundamentally wrong to hold people in jobs that only exist inside the furlough" and he admitted that unemployment "will continue to rise" despite the new measures.

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Lord Simon Wolfson, chief executive of retail giant Next, said a lot of traditional retail jobs may become unviable after a shift to online shopping during the coronavirus pandemic.

He said the next five weeks running into the end of the furlough scheme will be "very uncomfortable for a lot of people in retail".

"I wouldn't want to underestimate the difficulty that is going to cause a lot of people who work in retail," he told the BBC.

Steve Barclay, who is Mr Sunak's deputy as chief secretary to the Treasury, defended the measures as being targeted to roles that remain "viable" but warned "we cannot save every job".

He said it was "very sadly" the case that there will be more unemployment as a consequence of coronavirus but that support was targeted at getting those in "viable" jobs back to work while the unemployed can be retrained.

"The chancellor has been very honest that we cannot save every job, but what we need to do with these measures is target our funding on jobs that are viable, enabling people to come back, rather than them being at home with a furlough that's already for eight months, for a very long period of time," he told the BBC.

The outlook for those who missed out on the chancellor's support package isn't good, with Boris Johnson predicting the latest coronavirus restrictions will be in place for six months - the same period of time the Job Support Scheme will last for.

Shadow chancellor Anneliese Dodds warned unemployment was heading towards "1980s levels" despite Mr Sunak's wage subsidy package.

The support scheme was announced on the same day the UK recorded its highest ever number of daily coronavirus cases, with 6,634 new infections recorded.

And the UK’s national debt, once again, hit a new record of £2,023.9 billion at the end of August following huge coronavirus borrowing - and Mr Sunak's scheme is likely to add hundreds of millions to that number.

Mr Sunak is hoping his new plan will encourage business to share the burden of coronavirus impacts and share some of the load paid for by furlough.

Under furlough the government paid 80% of people's wages - under the new scheme it will pay just 22%.

A worker doing a third of their normal hours will still receive 77% of their usual pay, with employers and the government paying for unpaid hours.

Other measures included in the package include an extension of the VAT cut for tourism and hospitality and more flexible terms for the repayment of Government-backed loans.