Labour’s shadow chancellor Anneliese Dodds has promised to “restore trust” with business as she accused the government of taking a “cavalier” approach to the public finances during the coronavirus crisis.
Ms Dodds set out the party’s proposals for a business rebuilding programme to stave off the threat of mass company failures when emergency loans come due for repayment next year.
She accused the government of wasting “enormous amounts of public money” on failed schemes to tackle Covid, such as a £130m contract with a Conservative donor for testing kits that were unsafe and £150m on facemarks that could not be used by NHS staff.
And she said chancellor Rishi Sunak was now planning to hand over £2.6bn in job retention bonuses to businesses, many of which were planning to keep furloughed staff in work anyway.
But she warned the chancellor not to try to claw any of the money back through tax rises in his autumn budget.
“Already, with the economy still struggling, the language of ‘restraint’ has returned,” she said.
"We all know what that means from the mouth of a Conservative chancellor. More jobs lost in places that can least afford them – with local councils being hung out to dry and forced to cut thousands of staff.
"Attacking the very communities the Conservatives said they would protect. And taking place at a time when our government should be focused relentlessly on jobs, jobs, jobs.
"Threatening to hike taxes now, just so they can cut them before the next election. To make even deeper spending cuts, in the hope people will have forgotten by the time they go to the polls. Playing politics with people’s jobs and livelihoods.
“All this is taking place while the Conservatives have wasted enormous amounts of public money. It is a file of failure that no carefully crafted Instagram story from the chancellor can hide.”
Ms Dodds took a swipe at Mr Sunak’s as a Goldman Sachs investment banker, comparing it to her own political record of fighting money laundering and tax evasion.
“As chancellor, I would ensure that public money was always spent wisely. Targeted where it’s needed most. Not splurged where it isn’t.”
Ms Dodds called on the government to give its backing to Labour’s proposals for a targeted extension of the furlough scheme in sectors worst hit by the pandemic and state-backed training for workers unable to go back full-time.
And she called for investment in green jobs and environmental innovation, saying “we can no longer accept public funds paying for projects that make the shift to net zero harder”.
She drew on her own experience as the child of a small businessman father as she spoke of the need to rebuild trust, in terms which will be seen by some as an attempt to draw a line under Jeremy Corbyn’s leadership of Labour.
“We must work together to rebuild businesses,” said Ms Dodds.
“That needs real partnership – and trust - between government and businesses.
“Businesses who’ve had to watch our global reputation being trashed, as the Conservatives threaten to break international law. Businesses despairing at the contrast between the UK government’s limited ambitions, and the green investment being undertaken in Germany, France and beyond.
“As chancellor, I would restore that trust with business. Because I understand what a critical role business plays in creating jobs and supporting livelihoods across the country
“I’ve talked to so many business owners who can feel a lifetime of hard work slipping through their fingers.
“My father was a small businessman; an accountant who worked a six-day week for decades. His staff were more like friends than employees. I know how awful he would feel if he were in the shoes of so many business owners right now."
Federation of Small Businesses (FSB) national chairman Mike Cherry responded: “It’s encouraging to hear the opposition pledging to work hand in hand with small businesses at this incredibly difficult juncture.
“The Shadow Chancellor is absolutely right to call on government to rule out tax rises in the immediate future – any hikes would seriously stifle our nascent economic recovery.”
But the CBI warned that Ms Dodd’s plans “risk adding red tape at a time when firms need to access support simply and quickly”.
CBI chief economist Rain Newton-Smith said: “Labour clearly recognise the unrelenting pressure firms are facing. A focus on protecting jobs, upskilling workers and the need to support good businesses through this unprecedented crisis is sound and sensible."
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