Friday 17 April 2020 / 6:21 PM Anneliese Dodds / Coronavirus / Economy

Dodds writes to Chancellor on ongoing significant problems with Government support schemes

Anneliese Dodds MP, Labour’s Shadow Chancellor, has written to the Chancellor Rishi Sunak highlighting the “many gaps and inconsistencies” remaining in the “delivery of the different schemes and their ability to provide support for businesses and jobs”.

Emphasising that “time is running out” to “provide sufficiently clear guidance” on the Coronavirus Job Retention Scheme, which is due to launch on Monday, Dodds has called on the Government to “be clear that firms must avoid making redundancies wherever feasible”.

The Shadow Chancellor has also stated that the Government “must be prepared to go further” with the Coronavirus Business Interruption Loan Scheme, highlighting the low uptake in the scheme which has left the UK lagging “far behind other European countries in getting loans to struggling firms”.

Finally, Dodds has highlighted the lack of international cooperation in tackling the crisis. Stating that the UK should “lead global efforts to fight the virus”, Dodds notes that any “health and economic crisis in developing countries will spread rapidly to the UK and undermine any nascent recovery” and there is currently “no international agreement over Special Drawing Rights”.

 

 

[Full text of letter]

 

Dear Chancellor,

Thank you for your response to my letter detailing my concerns about the Government’s schemes to support jobs and businesses during the coronavirus outbreak. Despite some welcome changes since last week, there is still evidence of significant problems with many of the existing programmes and a number of my key concerns remain outstanding. In particular, there remain very urgent questions about the delivery of the different schemes and their ability to provide support for businesses and jobs.

The Coronavirus Job Retention Scheme will be operational on Monday, and I am grateful to those public servants who have been working hard on the scheme. However, time is running out to provide sufficiently clear guidance on the Scheme, with less than one working day left until launch. In addition, I remain deeply concerned by reports that some eligible employers are not adopting the JRS and choosing instead to lay off staff. I would like to ask again for the Government to be clear that firms must avoid making redundancies wherever feasible. I would also urge Government to consider increasing the flexibility of the scheme to enable short-hours working and the resumption of relevant economic activities as and when social distancing measures are reduced.

It is encouraging to know the Government is in dialogue with lenders to make the CBILS and new CLBILS work more effectively. However, the UK still lags far behind other European countries in getting loans to struggling firms. We face a looming insolvency crisis if uptake is not improved dramatically. The Government must be prepared to go further and urgently consider direct changes to the scheme, such as guaranteeing 100% of loans to small firms.

 

The UK should also be prepared to lead global efforts to fight the virus, as it led global efforts during the financial crash. In a globalised world, the health and economic crisis in developing countries will spread rapidly to the UK and undermine any nascent recovery. While the G20 Action Plan and IMF crisis response plan are steps in the right direction, I am concerned that there still appears to be no international agreement over Special Drawing Rights – and hope you will push for this.

Finally, while I am grateful for the detailed responses to the issues around coverage raised within the annexe to my letter, I am concerned that many gaps and inconsistencies remain. I was, in addition, disturbed by what appears to have been a stepping back from the previous commitment by central Government to cover the costs of local authorities, with instead only funds from the Covid-19 Response Fund being referred to in your letter. I hope this can be rectified in the coming days.

I remain committed to working constructively with you to try and ensure that jobs and livelihoods are protected during this crisis. I would like to urgently request another meeting with you to discuss the concerns detailed above, as I requested in my previous letter.

Anneliese Dodds