Although the furlough scheme has successfully safeguarded millions of jobs over the summer, to avoid steep rises in unemployment the chancellor needs to follow the lead taken by several other European countries and adopt a series of radical policies.
This is the premise behind the TUC’s in-depth New Jobs Protection and Upskilling Plan published today. It urges the government to seize the moment to prepare for the jobs of the future, ensure younger workers gain new skills and establish a fairer labour market that offers “decent work to everyone”.
In Germany, France and other countries, the TUC noted, unions and employers have extended their equivalent furlough schemes for at least a further six months from October.
Among the TUC’s proposals for its “job retention deal” were that:
- The scheme should support workers who cannot work because they are in the group previously told to shield or who have caring responsibilities that mean they cannot work
- Similar support should be put in place for the self-employed, including those who have lost out on previous support
- Workers should continue to receive at least 80% of their pay for time they are not working
- Workers earning the national minimum wage should receive 100% of their normal pay
- Any worker working less than 50% of their normal working time must be offered funded training
- Businesses hit by local lockdowns would automatically qualify for the scheme.
However, the TUC said its proposals did not come without strings. Again, it cited countries such as Germany, Denmark, France and the Netherlands as models that could inform UK policy. Among its proposals were that:
- Government should require businesses to demonstrate they have been hit by coronavirus restrictions to qualify for the Jobs Retention Deal
- The scheme should require workers to be working for a minimum proportion of their normal hours
- Businesses accessing the scheme must set out Fair Pay Plans
- Businesses that access support should set out a plan for decent jobs
- Businesses that access support should pay their corporation tax in the UK
- Businesses accessing the scheme should commit to keep people in work and not pay dividends while using the scheme.
With more businesses now able to open up, support needed to be targeted on those businesses that needed it most, the study recommends, in an echo of Labour policy. In July, shadow chancellor Anneliese Dodds spelled out that support should continue beyond October and be targeted on specific sectors. She warned: “The reward for months of hard work and sacrifice by the British people cannot be a P45.”
There is still time to avoid a tsunami of unemployment” – Frances O’Grady, TUC
The TUC said in its report that a continued scheme should support “viable businesses that can retain the skills of their workforce – but need more time to get back on their feet”.
Among the issues addressed by the proposals, the TUC noted that the crisis had hit those in low paid jobs particularly hard, particularly those for whom 80% of wages meant falling below the level of the national minimum wage. It cited Bank of England research that showed that while those earning £35,000 and above had been able to build up savings, those earning less than £20,000 have had to dig into their savings to get by.
The new scheme should require employers to ensure that no worker receives below the national minimum wage for their normal weekly working hours.
Frances O’Grady, the general secretary of the TUC, said: “Ministers cannot afford to throw away the good work of the [furlough] job retention scheme. There is still time to avoid a tsunami of unemployment.”
“Working people carried the burden of the pandemic. They must not bear the brunt of this recession too. Protecting decent jobs with fair pay is how we recover.”
Agata Nowakowska, area vice president EMEA at global learning company Skillsoft, offered support for the plan’s training elements: “It’s crucial we take this opportunity to prepare our workforce for the jobs of the future – building a stronger labour market that will support businesses through challenging economic conditions. Organisations will need to think holistically about managing reskilling, upskilling and job transitioning.
“As the war for talent intensifies in the post-pandemic circumstances, employee development and talent pooling will become increasingly vital to building a modern workforce that’s adaptable and flexible.”
The UK furlough scheme is still scheduled to end in October with chancellor Rishi Sunak and Prime Minister Boris Johnson maintaining their stance that continuing it in the long term would be counterproductive despite there being, said Sunak, “hardship ahead for many people”.
Virgin Atlantic, which announced today plans for a further 1,150 job cuts, has said it is also introducing a voluntary, company-financed furlough scheme for 600 crew when the government’s Coronavirus Job Retention Scheme ends on 31 October.