Northern mayors urge MPs to reject Rishi Sunak’s ‘insufficient’ furlough replacement

Scheme will see people across the country ‘plunged into hardship’

Jon Stone
Policy Correspondent
Saturday 10 October 2020 22:35
Andy Burnham: 'To accept the chancellor's package would be to surrender our residents to hardship'

Rishi Sunak’s new furlough scheme is “insufficient” and will lead to the destruction of livelihoods across the north of England, city mayors have warned.

At a joint press conference on Saturday, Andy Burnham, Steve Rotheram, Dan Jarvis, and Jamie Driscoll urged MPs to demand a vote in the Commons on the financial support package – and to reject it.

It comes as Labour claimed the new scheme would support just 6.5 per cent of the one million jobs in restricted or shut down sectors.

Greater Manchester mayor Mr Burnham told journalists the package was “insufficient to protect our communities as we go into autumn and the winter” and would see people “plunged into hardship”.

He said the plan would achieve “the precise opposite of what this government was elected to do: it will level down the north of England and widen the north-south divide”.

Mr Sunak’s scheme pays two-thirds of the wages of workers whose businesses have been forced to close by law. It was announced on Friday ahead of new measures to tighten lockdown restrictions that are expected to see more businesses closed in outbreak areas.

But the northern city mayors say the scheme is less generous than the 80 per cent furlough it replaced, that it gives no help to the self-employed, and that it does not help people whose businesses will be indirectly affected by the measures.

They also highlighted a six-week gap between the introduction of new measures and the payment of any assistance which would see people go into rent arrears and debt.

“If you work in a bar or in a kitchen linked to a pub on possibly living wage but more likely minimum wage, how is it possible to live on two-thirds of your wages if the government has forced your business to close? Those people can't choose to pay two-thirds of their rent or two-thirds of their bills,” the Greater Manchester mayor said.

Mr Rotheram, mayor of the Liverpool city region, said the package had been greeted with “incredulity and dismay” by northern leaders.

“We are actually talking about lives and livelihoods in this instance. Imposing new restrictions without also providing adequate funding support is simply not acceptable,” he said.

Mr Driscoll, the mayor of North Tyne, which includes Newcastle, added: "When the state says you may not go to work, you may not trade, then people should be getting 100 per cent compensation. Being paid two-thirds of your wages, especially if you're on minimum wage, is not acceptable.

“We are all as one on this across the whole of the north: if you take away someone’s freedom to earn a living you have to compensate them fully.”

The government has said previously MPs will be given a vote on new lockdown measures where possible, following discontent from Conservative MPs.

The northern leaders however say the government has told them the financial package is non-negotiable, and that it was introduced at the last minute.

Mr Burnham said “the muscle of the north” in parliament – whether Labour or Tory – should force the government to change its approach.

An analysis by Labour points out that many industries will be unviable and "shut in all but name", but not actually legally forced to close - and so will not be eligible for the planned support package.

Examples of such actors include the conference industry, which has an estimated 142,000 event caterers, 11,000 exhibition organisers, and 18,000 conference administrators. The wedding industry employs around 500,000 people, while sports employs 369,000. The creative arts industry and the 85,750 it employs are also at risk.

The mayors are also angry that the government announced the financial package and briefed the new lockdown measures to newspapers before engaging with local leaders.

Dan Jarvis, mayor of the Sheffield City Region, said it had been a “mistake” to brief newspapers, adding: "Nobody sat in Whitehall could ever understand the situation on the ground in the communities we represent ... It's felt on occasion that rather than partners we are passengers in this process."

Labour leader Keir Starmer joined in on the attack over the government's communications strategy, accusing Boris Johnson's team of "gross irresponsibility" for briefing newspapers "without any detail, without any consultation and without any statement from the prime minister".

At the start of the pandemic the government was widely criticised for leaking details of its lockdown and shielding plans to individual journalists before formally announcing them.

The criticism saw Mr Johnson bounced into holding daily coronavirus press conferences where major announcements were made on live television for the public. The government eventually stopped the briefings after the peak of the pandemic passed.

Next week the prime minister is expected to announce the introduction of a “three-tier” system, under which every part of the country will be given a rating depending on its severity.

Different ratings will require different levels of restriction, with the most serious rating expected to again involve the closure of hospitality businesses like pubs and restaurants.

Shadow business secretary Ed Miliband said: "The government has been forced into a climbdown about the principle of supporting shut-down, so-called "unviable" businesses and jobs.

"But there are massive holes in the new safety net. Businesses including weddings, theatres, cinemas, events, and many suppliers will still be left out on a technicality. They are not legally closed but they've been forced to shut in all but name.

"Ministers must urgently rethink their damaging sink or swim approach which consigns whole sectors of our economy to the scrapheap." 

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