No extra support for workers in lockdown areas because ‘the national debt is rising’, government says

Communities secretary says support package enough after northern leaders warn it is ‘insufficient’ and will destroy communities

Jon Stone
Policy Correspondent
Sunday 11 October 2020 13:59
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Robert Jenrick: 'We can't do everything, we're in deep recession'

The government has ruled out giving more support to workers and businesses hit by new lockdowns in the north of England because of concerns it would cost too much.

Communities secretary Robert Jenrick said on Sunday that “the national debt is rising” and that “we can’t do everything” to protect all jobs.

He was responding to a warning by northern leaders on Saturday that the support package unveiled by the government was “insufficient” and would see “communities plunged into hardship”.

The mayors of Greater Manchester, Sheffield, Merseyside and Tyneside said the scheme – which covers just two-thirds of wages and only applies to some workers in specific sectors – would “level down the north of England and widen the north-south divide”.

But Mr Jenrick told Sky News: “We can’t do everything. We’re in a deep recession, the national debt is rising.

“I think most reasonable people would see that the chancellor’s put in place an unprecedented package of support.

“This is a good safety net for those individuals but we understand that it will be very difficult for them. The winter is going to be a very challenging one and we can’t promise to protect every job or every business.

“We can promise to offer hope and opportunity to those individuals who want to or will need to look for new jobs and opportunities.”

The refusal to improve the support package for people hit by the lockdown comes amid disquiet on the Conservative party’s right wing over the amount of public money being spent by the chancellor Rishi Sunak.

But proponents of extra support point out that public borrowing is currently effectively free because of negative interest rates, making it a good time for the government to spend money.

The new scheme only pays two-thirds of wages compared to 80 per cent on the previous furlough scheme, and only covers businesses whose premises are forced to close by law rather than indirectly shut because of economic pressures. Labour estimates that the scheme will cover just 6.5 per cent of the jobs in restricted or shut down sectors.

Shadow work and pensions secretary Jonathan Reynolds said there was “anger and frustration” in his Greater Manchester constituency and across the north at the government’s approach and that “people think they’ve been treated with contempt and not with respect”.

He said the government had squandered its opportunities to tackle the virus, adding: “The fact is there are going to have to be further measures and the reason for that is the government have lost control: they’ve lost control of the messaging, they’ve lost control of test and trace, they’ve lost control of the virus unfortunately. That means we are going to have to have further measures: that wasn’t inevitable.

Boris Johnson and Chancellor Rishi Sunak do not want to spend more money on workers

“That time we got from the lockdown and the development of what should have been an effective test and trace system should have meant we have to get to that position. But the crucial point is this: further restrictions have to come with economic support.

“The situation for businesses here in my constituency is not acceptable. How can they plan for next week? They’ve had nine weeks of very restrictive local restrictions, that has had a huge impact on them, of course it has – and now we find out we will learn tomorrow what is going on. The prime minister’s got to get a grip on this, he’s got to come to parliament – but crucial any further restrictions have to come with extra support.”

Mayor of Greater Manchester Andy Burnham had a similar stark message for the government.

“If you go ahead with this financial package, in my view, that will be to break what the government said it would do when they were elected,” he told Times Radio.

“If they continue with this, jobs will be lost, businesses will collapse, the fragile economies of the north will be shattered.

“The government has a real choice here, if it proceeds on the path it is on, in my view, the central so-called mission of this government to level-up will be over.”

But responding to criticism of the substance and style of the government’s announcement Mr Jenrick said: “I think that is a very significant intervention. It’s building on the winter economy plan that the chancellor had set out two weeks ago, it was very well received, it was supported by the TUC and the CBI.

“As you say it ensures that those workers in businesses that are asked to close by law are then able to receive two-thirds of their unearned wages. We’re also providing those business grants to the small and medium sized businesses that need them.”

He claimed that the government had worked closely with local leaders on the plan, adding: “I appreciate that people working in certain sectors and businesses owners will be feeling very concerned but we’ve set out, I think, a fair and generous package to support them. We’ve spent the weekend working with those local leaders: it’s not correct what you heard from Jonathan Reynolds that there hasn’t been good communication, I’ve spent the whole weekend talking to leaders on Merseyside and Greater Manchester from other parts of the country.”

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