Rishi Sunak's job support scheme is worse than comparable schemes in other European countries – a difference that will cost jobs, Labour has warned.
Shadow chancellor Anneliese Dodds said on Friday that the Job Support Scheme, which is replacing furlough, made it needlessly expensive for businesses to project jobs.
Branding the programme "sink of swim" and "a throwback to the worst days of Thatcher", Labour called for the scheme to be changed to incentivise businesses to keep more staff on.
An analysis by the party shows that employers have to pay hundreds of pounds per staff member to keep them on the books, under a sky-high employer contribution.
The equivalent German job protection scheme has no employer contribution at all, while those in the French and Dutch schemes are around half the size of the one demanded by the UK programme.
The scheme in theory allows businesses to keep staff on with shorter hours, with the government topping up their wages
But the result of the employer contribution is that it is cheaper for some companies to simply let staff go than use the UK job support scheme.
Mr Sunak is expected to issue an update to the scheme on Friday afternoon, with extra support expected for local areas facing special lockdown measures.
Anneliese Dodds, Labour’s Shadow Chancellor said: “The Chancellor should have introduced a Job Recovery Scheme that incentivised employers to keep more staff on. Instead, his Job Support Scheme makes it more expensive to bring staff back than many other international schemes.
“Viable businesses just need support to cope with the restrictions the Government has imposed on them. They pinned their hopes on the Chancellor to deliver, but he’s forcing them to flip a coin over who stays and who goes.
“This wasn’t by accident – it was by design. The Chancellor’s sink or swim Job Support Scheme is a throwback to the worst days of Thatcher, and just like in the 1980s people on the lowest incomes will pay the highest price.”
