Chancellor Rishi Sunak must realise some industries, like air transport, tourism and retail, need furlough help over winter – Christine Jardine MP

I type a lot of words each week, but perhaps few have been as important as those in the letter I sent to Chancellor Rishi Sunak a few days ago.

Rishi Sunak, seen having a pancake at a stall at the London Wonderground comedy and music festival, should recognise that some sectors, like events, creative arts and entertainment, need the furlough scheme to continue (Picture: Peter Nicholls - WPA Pool/Getty Images)
Rishi Sunak, seen having a pancake at a stall at the London Wonderground comedy and music festival, should recognise that some sectors, like events, creative arts and entertainment, need the furlough scheme to continue (Picture: Peter Nicholls - WPA Pool/Getty Images)

As furlough ended, I appealed to him to rethink that decision and to ensure that there continues to be a lifeboat available for those many families who may now find themselves adrift on our stormy economic seas.

But with the start of a new working week, more than a million people are left wondering what the end of job support, the rise in VAT and the £20 a week less for those now on Universal Credit could mean for them.

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Will they be caught up in the unemployment tidal wave which could now sweep through our economy?

The consequences could be devastating for families already facing a winter of spiralling fuel bills, rising inflation and shortages on our supermarket shelves.

And Covid. Again. During the past 18 months, furlough has provided indispensable support in a time of unprecedented widespread need.

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Nobody could deny that the Conservative government’s original financial package mitigated the worst and immediate effects of the pandemic on employment.

But as time passed the holes began to emerge and the lack of a long-term strategy became clearly visible. So that as restrictions have largely ended the need for support, that long-term vision of how we emerge strong from this continuing struggle, has not dissipated.

As long as there are jobs, businesses and industries under threat in this country, our economy and our individual well-being are also at risk.

This is the stark reality.

The ten industries with the largest proportion of employees on furlough are the ones most likely to see job losses now the scheme has ended.

Across those sectors alone, 110,000 people are still on furlough and face an elevated risk of losing their job. Each one of them represents a family facing that uncertain future.

The British Chambers of Commerce has warned that one in five of those companies still using furlough could turn them into redundancies.

Some of those most at risk are in industries which are still affected by public health restrictions.

Others depend on activities that – even without government restrictions – many people will be reluctant to do during winter, amid worries that we could again face a cold weather wave, this time of the Delta variant.

Small businesses in these sectors will find it especially difficult, not least because they now face an extra National Insurance burden.

And yet, as I pointed out in my letter to the Chancellor, there is a clear and possible way out of the danger.

I am not usually a big fan of numbers, feeling that they can obscure the real human impact, however in this case they paint a clear and unequivocal picture.

The ten sectors now most at risk, when combined, account for less than 10 per cent of the government’s monthly expenditure on furlough.

According to HMRC, the government paid out approximately £1.1 billion in furlough claims in July.

Yet the cost of supporting workers in the ten most furloughed sectors was just over £100 million.

Extending support in these ten sectors for six months – from October to the end of March – would help the most vulnerable workers through winter, and would cost £600 million in total – or £100 million a month.

In total, it is just over half of what the government spent on furlough in July alone. It’s well below the £850 million that last year’s “Eat Out to Help Out” scheme cost the taxpayer.

It’s clear that it would be an eminently affordable step to take, especially when you consider that not taking it, allowing those jobs to be lost, could come at a much greater long-term cost.

Helping those families cope with a challenge which they did not create should not come with a price-tag.

Supporting those workers who face the greatest risk of losing their job should not be an exercise in accountancy.

It is a humanitarian necessity, and far more affordable than the strain on government finances that mass unemployment will cause.

We all know that the cost of the pandemic so far has been eye-watering. The government’s main response to date in meeting that has been to hike up National Insurance with an unfair tax which will hit those who are already carrying the heaviest burden.

And yet there are other possibilities.

While many have struggled, and continue to, in the pandemic, some global behemoths have further extended their dominance, and profits.

Amazon and others have benefited from our accelerated switch to online retail and food deliveries.

Those ten threatened sectors: passenger air transport, travel agency and tour operator activities, photography, creative arts and entertainment, clothes manufacture, events, musical instrument making, reservations services, printing and retail are also vital to our economic well-being as a country.

If the government were to push for adherence to the original 21 per cent figure in President Joe Biden’s global corporation tax proposals that would have garnered an extra £6.8 billion a year for our exchequer from those with the deepest pockets.

And why wait for the US to lead?

Why not implement a one-off windfall tax to capture the additional Covid-driven profits of the giants to help foot the bill for all of us.

The economic threat of Covid-19 is clear, and these steps could be part of the solution.

I wrote to the Chancellor in the hope that he might consider the impact on the lives of those who could find themselves out of a job this week.

Remind him that behind the numbers and statistics so easily thrown about are people with families to feed who are victims of circumstances far beyond their control.

I am waiting for his response.

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