Rishi Sunak is under mounting pressure to stave off an unemployment crisis by extending the furlough scheme, politicians have warned.
MPs from across the political divide are pressing the Chancellor for a more targeted successor scheme aimed at sectors hit hardest by Covid-19, such as the hospitality and entertainment industries. Trade body UKHospitality estimates at least 350,000 jobs could go in the industry with a cliff-edge end to the scheme, currently scheduled for next month.
Julian Knight, Conservative chairman of the culture, media and sport select committee, says: “There is growing momentum for it for those industries that simply can’t exist under social distancing. We are going to look ridiculous and set the economy back a generation if our world-leading creative sectors go belly up for the sake of a few billion.”
Anneliese Dodds, the shadow chancellor, said there was “still time for the Chancellor to step back and make his wage support schemes more flexible and targeted to protect jobs”. She added: “If he carries on with this one-size-fits-all approach, we risk another huge spike in unemployment this autumn.”
Sarah Olney, Liberal Democrat business spokesman, called for “targeted packages”, adding: “Those who work in the creative and media sectors were particularly badly hit and these will be among the last sectors to reopen.”
The furlough scheme protected 9.6m jobs at its peak. Alongside sector-specific deals, industry groups are pressing for a slower tapering to cushion the blow to businesses, as well as possible extensions of council grants to small businesses to deal with future local lockdowns.
“I am more optimistic about this than I was six weeks ago,” one representative said. “A very sharp cliff edge with nothing for firms until next year does not feel sustainable.”
A Treasury spokesman said: “We’ve been clear that we can’t sustain this situation indefinitely and must now focus on providing fresh work opportunities for those in need across the UK.”