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Source: Labour List UK

© UK Parliament/Jessica Taylor

Anneliese Dodds has accused Rishi Sunak of waiting until the “last possible minute” to make a statement on the furlough scheme providing clarity for employers just 24 hours before another key redundancy deadline on Friday.

Responding to the announcement today that the government will continue to contribute 80% towards wages, she highlighted that those business with more than 100 employees would have had to start redundancy process tomorrow.

Sunak also revealed that the job retention scheme would continue until the end of April 2021, a month longer than previously announced, and declared that this would give “businesses and employees across the UK certainty into the New Year”.

But the Shadow Chancellor argued: “Once again the Chancellor has waited until the last possible minute to act, leaving businesses in the dark with less than 24 hours before they have to issue redundancy notices.

“Rishi Sunak’s irresponsible, last-minute decision-making has left the UK with the worst recession of any major economy.”

In October, the government revealed that the furlough scheme would be extended until March 2021 just hours before the scheme was due to end. Dodds slammed the Chancellor at the time for what she called a “last-minute” U-turn.

Sunak had planned to review the scheme next month to decide whether companies would be required to contribute. Businesses were required to cover an increasing proportion of workers’ pay as Covid restrictions eased earlier this year.

Firms with more than 100 staff have a statutory obligation to hold consultation processes on redundancies for at least 45 days. Employers would have needed to make plans for February by Friday to allow times to issue redundancy notices.

Ahead of the deadline for redundancies tomorrow, the Treasury confirmed in a statement today: “The government will continue to pay 80% of the salary of employees for hours not worked until the end of April.

“Employers will only be required to pay wages, National Insurance Contributions and pensions for hours worked; and NICs and pensions for hours not worked.”

According to Office for National Statistics figures published on Tuesday, redundancies soared to a record 370,000 during the three months leading up to the previous expected end to the furlough scheme in October.

The extension announced to the scheme in October came after the deadline for large businesses to start these proceedings, at 45 days, and also small and medium-sized businesses, which have a 30-day statutory requirement for redundancies.

Figures from the ONS show that the number of workers on furlough has more than doubled since the end of October with the government subsidising the incomes of around five million people, or 15.5% of the UK workforce.

Around 2.9m jobs were still protected by the job retention scheme at the end of October. The scheme reached its peak uptake in May this year at around 8.9m jobs.

Sunak has been urged to also extend the self-employed income support scheme as well, with the Association of Independent Professionals and the Self-Employed (IPSE) warning that the self-employed have too often been an “afterthought”.

Commenting on the furlough extension until the end of April, IPSE director Andy Chamberlain said: “It’s right for the government to extend the furlough scheme, but it must not forget about the self-employed: it must extend SEISS too.”

He added: “At least 1.5 million self-employed have fallen through the gaps in government support – particularly directors of limited companies and the newly self-employed.

“We urge government to extend SEISS and also finally fix the gaps in it to get support to these still desperately struggling groups.

“As the extension of the furlough scheme shows, we are far from the end of this and the self-employed need just as much protection and support through the coming months as the rest of the workforce.”

Business groups and union leaders have warned the government that further action is needed to prevent people from losing their jobs and having to rely on Universal Credit, which is due to be cut by £20 per week in April.

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