Wednesday 30 September 2020 / 10:37 PM Anneliese Dodds

Three million jobs on the brink as redundancy deadline looms for small businesses

Three million jobs on the brink as redundancy deadline looms for small businesses 

Labour’s Shadow Chancellor Anneliese Dodds today (Thursday 1 October) warns that the jobs of almost three million people working for small businesses hang in the balance because of Chancellor Rishi Sunak’s flawed Job Support Scheme.

Today is the deadline for employers to issue redundancy notices if they are planning to lay off between 20 and 99 people before the Coronavirus Job Retention Scheme (CJRS) closes on 31 October. That deadline is critical for Small and Medium Size Employers (SMEs), who employ between 1 and 249 people.

New analysis from Labour shows that at the beginning of September an estimated 2.8 million SME employees were furloughed under the CJRS. Since then new restrictions have been introduced across the UK that mean 133,055 SMEs, including restaurants, licensed clubs and event operators, cannot operate at all or are trading at reduced capacity.

Over a million SMEs are also still experiencing a fall in turnover, with approximately 310,000 turning over less than half what they did over the same period last year. Many will have to make tough decisions about staffing as a result.

Last week the Chancellor introduced a new Job Support Scheme (JSS) to replace the CJRS as part of his ‘Winter Economy Plan’. But as the JSS makes it more expensive for employers to keep workers on part-time than employ some full-time and let others go, today’s redundancy deadline will still loom large for almost 3 million British workers.

For example, the scheme means that bringing back one bar manager full-time will cost £455.30 per week, but it would cost £610.89 for the same bar to bring back two workers for half their working week. That’s a difference of £155.60 – or £78.60 if the employer qualifies for the Job Retention Bonus.

Dodds has also highlighted seven ways in which the Chancellor’s plan fails Britain’s workers and called for an urgent meeting with Sunak to discuss how to set Britain on a more secure economic path:

  1. Why does the Job Support Scheme make it more expensive for employers to keep workers on part-time than keeping some on full-time and making others redundant?
  2. Why does the Winter Economy Plan not incentivise or support training and why won’t any of the government’s recent announcements on skills be in place until April 2021 at the earliest?
  3. Why there is no support for sectors most affected by social distancing measures and unable to take staff back?
  4. What will be the impact on self-employed workers who will see a reduction in support from 70 percent to 20 percent of their average profits?
  5. Will the Chancellor plug gaps that have left millions of workers without any form of support since March?
  6. Why is there no mention of increasing UK ambitions on green investment to the level of countries like Germany and France?
  7. When will the Government present a full Budget to address the true scale of Britain’s economic crisis?

Commenting, Anneliese Dodds said:

“Last week the Chancellor should have listened to Labour and introduced a Jobs Recovery Scheme that incentivised employers to keep more staff on. Instead, millions of jobs are at risk because he’s forcing small businesses to choose which staff to keep and which to fire.

“These are viable businesses that 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 pulling up the drawbridge at the worst possible time.

“This wasn’t by accident – it was by design. This sink or swim mentality 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.”