The government is being urged to extend its furlough scheme in areas forced into local lockdowns such as Leicester and for key sectors of the economy.
Ministers are being warned small businesses will suffer “a flood of redundancy notices” in coming months if the government fails to offer targeted coronavirus support.
Shadow chancellor Annelise Dodds has warned that smaller firms will be particularly hard hit as mass unemployment grows.
With Rishi Sunak due to set out his latest update on the economy next week, Dodds has called on the Chancellor to deliver a Budget for jobs – with particular emphasis on hospitality and the creative sectors of the economy.
One immediate measure should be the government extending the furlough and self-employed support schemes for areas like Leicester forced into local lockdowns.
She accused ministers of being “completely divorced” from the scale of the looming unemployment crisis.
Dodds also warned the government against increasing taxes on middle and low income earners to fund rescue packages seen so far. Instead, she urged ministers to look at imposing a wealth tax on the rich to aid the recovery.
She said a “new settlement” was needed to address the injustice of the worst-off paying more tax proportionally than high earners, while the richest derive a significant part of their income from wealth.
The Shadow Chancellor also called for an extension of the benefit sanctions freeze that was put in place to prevent penalising jobseekers during the pandemic.
Delivering her first major speech since succeeding John McDonnell in the post, Dodds accused the government of dithering over the lockdown, increasing testing and getting PPE to frontline workers.