Home U.K. Coronavirus latest: Labour urges ministers to boost support for businesses amid lockdown...

Coronavirus latest: Labour urges ministers to boost support for businesses amid lockdown s

THE LABOUR Party has warned ministers that unemployment in Britain could soar to the levels seen in the 1980s if the right support isn’t provided to businesses. Political leaders are battling over how the UK should respond, with Labour claiming more support must be provided to businesses when the furlough scheme starts to run down in August. According to analysis from the House of Commons library, it’s believed up to one million people could be added to the current unemployment rate of 2.8 million.

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If no extra aid is given then the UK could experience levels of unemployment close to when Margaret Thatcher was Prime Minister.

In 1984, unemployment in the UK peaked at 3.3 million when she was premier.

As Boris Johnson prepares to announce plans to “build, build, build” new houses, hospitals and schools, Labour has insisted that the Prime Minister shift his attention to protecting existing jobs.

Labour says this particularly applies to sectors which still have no date yet for reopening.

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Leader of the Labour Party Sir Keir Starmer speaks with a construction worker as he visits a develop (Image: GETTY IMAGE)

Nightclubs, casinos, indoor gyms, swimming pools, fitness and dance studios, are only a few examples of industries still awaiting a date to reopen.

From August, the Treasury has stated that employers will be required to make contributions to the furlough scheme.

The current scheme sees the state covering 80% of wages up to a cap of £2,500 per month, as well as employer national insurance contributions and pension contributions.

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British Prime Minister Boris Johnson and Chancellor Rishi Sunak visit Pizza Pilgrims in West India Quay, London Docklands, (Image: GETTY IMAGE)

This will be the case even if they have not been allowed to reopen.

For businesses who are still yet to open this could lead to redundancies and closure if they don’t break even.

The government has said it will also end the scheme completely in November.

Labour claims its unfair sectors who remain fully or partially shut should have to pay employer contributions.

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They believe businesses should only be having to pay if they are trading well again.

Shadow business secretary Ed Miliband spoke to the Observer and suggested that instead of Boris’ “build, build, build” the focus should be on “jobs, jobs, jobs”.

He said: “The scale of the economic emergency facing us is enormous. But the government is pulling the rug from under businesses employing one million people by demanding they start bearing the cost of the furlough when they don’t even know when they can reopen.”

General Manager Adam Komrower (L) helps a customer in the newly opened shop at the Andwell Brewing Company, a micro-brewery near Old Basing, west of London, on June 26, 2020 (Image: GETTY IMAGE)

“The government’s approach will put jobs, businesses and livelihoods at risk, which will impose costs on us all. Failing to act to protect jobs now will only add to the burdens we face in higher benefit payments, lost tax revenues and a smaller economy.”

Ed Miliband wasn’t the only former Labour leader to air his views on the governments’ approach, with former Prime Minister Gordon Brown also criticised the governments’ economic response to COVID-19.

He accused them of dithering and delaying and insisted that Boris Johnson has betrayed those who need help the most.

Mr Brown has also called for a budget in July saying: “A budget for jobs should include tax credits for those restricted to short-term working, retraining grants for those forced to move jobs and the rapid implementation of comprehensive employment, work experience and training programme for a new generation of school-leavers and graduates facing a historically-unprecedented autumn spike in youth unemployment.”

Shoppers walk inside the Intu Watford shopping Centre in Watford, Hertfordshire on June 26, 2020. – British shopping centre giant Intu, already hit hard before the coronavirus lockdown (Image: GETTY IMAGE)

The Treasury claims its furlough scheme is unparalleled in any major economy.

It is funding more than 8 million workers, at an estimated cost of £14bn a month.

It is expected that Boris Johnson will announce that there will be “no return to austerity”.

Austerity was a measure imposed by the Conservative/Liberal Democrat coalition from 2010, resulting in cuts of up to 40% to departmental budgets, and reductions in funding to councils.

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