Boris Johnson has refused calls to extend the furlough scheme beyond October despite introducing further restrictions to curb the spread of coronavirus.
The Government has been urged to “get around the table” and fast-track new job support plans amid reports the PM is working on a new German-style scheme to avoid mass unemployment once furlough ends.
Chancellor Rishi Sunak is said to be weighing up a new scheme as part of a wider emergency support programme as pressure mounts on the Government to help businesses survive a second wave of coronavirus.
One option reportedly being considered by the Chancellor is German-style wage subsidies as part of an emergency package of new support to stop a jobs carnage in the autumn.
The German Kurzarbeit (“short work”) system could see the Treasury subsidising the wages of workers for so-called short-time working. The furlough scheme will conclude at the end of October.
At Prime Minister’s Questions, Mr Johnson refused to commit to extending the scheme, despite mounting calls from Labour leader Keir Starmer and SNP’s Westminster leader Ian Blackford.
Mr Johnson said the Government will instead introduce “further creative and imaginative schemes to keep our economy moving”.
Sir Keir asked why business support was not announced at the same time as greater Covid-19 restrictions on Tuesday .
The Prime Minister replied: “Let’s be in absolutely no doubt that the work that this Government has done to protect the economy of this country, to support the jobs of 12 million people through the furlough scheme, enabled expenditure of about £160 billion has been unexampled anywhere else in the world.
“And I think he should pay tribute to the Chancellor and his work and we will go forward with further creative and imaginative schemes to keep our economy moving.”
The pair also clashed over schools.
Sir Keir asked Mr Johnson about the testing situation following children going back to school. The Labour leader blamed the wait on tests for 1 in 8 pupils missing class since schools reopened.
“How on earth did we get into this mess?”, the Labour leader asked.
The Prime Minister replied: “We are doing our level best to get every child a test who has symptoms and further to that, thanks to the efforts of teachers in this country, of parents, pupils, 99.9% of our schools are now back.”
He added that the risks to children of catching coronavirus were low.
Sir Keir then accused the Prime Minister of being “out of touch” with the experiences of parents with school-age children.
“That’s such a poor defence, the point… isn’t whether the children have got Covid, it’s that they’ve got Covid symptoms and then they’re off school.
“The Government’s own department shows that one in eight children are off school this week. That disrupts their education. Whether it’s Covid symptoms or other symptoms is nothing to the point.
“If the Prime Minister doesn’t see that, he’s really out of touch with families and what they’re going through in schooling day in day out in the last few weeks.
“The reality is losing control of testing is a major reason why the Prime Minister is losing control of this virus.”