Keir Starmer has urged the government to revamp its furlough scheme to include part-time work and to allow some sectors to receive support even after its current end-date in June.
The Labour leader said ministers should “urgently” adapt the existing programme, which will cost about £40bn, ahead of the easing of Britain’s coronavirus lockdown.
Sir Keir, launching his proposals for a “national consensus” on ending the lockdown, said: “Ministers should urgently make the existing furlough more flexible to manage people’s gradual return to full and part-time work.”
He told the BBC’s Today programme that he was urging chancellor Rishi Sunak to allow companies to keep some workers “semi-furloughed” so they can gradually return to business.
Under its job retention scheme, the government covers 80 per cent of the wages of workers who are not working, up to a cap of £2,500 a month.
The Financial Times reported on Friday that the Treasury is in talks with business groups to allow companies to claim support for staff returning to work part-time under plans for a gradual reopening of the economy in the coming months.
Manufacturers in particular have argued that they would struggle to return factories to full capacity immediately and would need the “flexibility” to slowly ramp up production with workers doing rotating shifts.
Officials are cautious because of the potential for fraud if companies are allowed to make claims for staff working a fraction of their usual hours.
A potential solution under consideration by the Treasury is to cut the time that an employee must be furloughed to qualify for the job retention scheme from three weeks to one — allowing plants to employ workers on a week-on, week-off basis.
Meanwhile, there would be some industries which would need further support from the furlough scheme beyond its current end point of June 30, said Sir Keir.
“For businesses that are still likely to be in lockdown, at the moment they face a cliff edge at the end of June when they lose all their employees,” said Sir Keir. “If that happens all we’ve done is delay the inevitable, which is massive job losses.”
The Labour leader also urged the Treasury to create “bespoke support” for industries facing significant challenges — such as the hospitality sector.
Mr Sunak told ITV news on Monday evening that the government was almost — in some scenarios — spending as much on the furlough scheme as the National Health Service, which was not sustainable.
He added that he was working out the most effective way to wind down the scheme and ease people back to work in a measured way. “To anyone anxious about this I want to reassure them that there will be no cliff-edge to the furlough scheme,” he said.
Meanwhile Sir Keir backed trade union calls for the government to ensure that plans to allow a return to the workplace should involve publicly-available risk assessment plans for every company in the country.
Under the government’s current proposals, drawn up over the weekend, the assessments would not be published. The business department has set out proposals for seven different types of workplace, emphasising social distancing and thorough cleaning. But the original drafts did not contain any details on what kind of PPE — protective kit — would be needed in each sector.
The Labour leader said the advice was “very very vague with lots of gaps in it” and called for “something stronger.”
“I accept it will vary from workplace to workplace, but this is not a luxury, it’s something we need to have,” he said.
He demanded a “national safety standard” to show that all workplaces and schools are safe, a national vaccine plan, the mass expansion of community testing and tracing and the protection of key and essential workers through adequate provision of PPE.
Sir Keir and other opposition leaders will hold talks later on Tuesday with Boris Johnson, the prime minister.