Government must adopt local furlough approach to save jobs, says TUC

Elliot Chappell

The TUC has called on the government to adopt a new approach to prevent mass unemployment in the Covid crisis by acting to “preserve jobs and stop family firms going to the wall through a new local furlough scheme”.

Responding to reports today that Downing Street is set to introduce further restrictions in the North of England, general secretary Frances O’Grady has called for a “fresh approach to protect jobs and livelihoods”.

The proposals from the trade union body include creating furlough schemes that run in an area for the duration of any measures, reducing the burden for employers in the job support scheme and providing support to self-employed workers.

O’Grady said: “We all hoped the economy would be starting to reopen and recover this autumn. But with further restrictions imminent in some areas, we need the Chancellor to adopt a fresh approach to protect jobs and livelihoods.

“In areas facing high infection rates and further business closures, the government must act to preserve jobs and stop family firms going to the wall through a new local furlough scheme – building on the existing national job retention and job support schemes, with help for the self-employed too.

“That’s the right response to this renewed public health emergency in parts of the UK. Local lockdowns put jobs in peril, but across the country families are worried for their livelihoods.

“Ministers need to get round the table with businesses and unions and hammer out a plan to save jobs and protect whole industries from going to the wall.

“The government must sort out its chaotic test and trace system and pay decent sick pay to everyone self-isolating. That’s how we control the virus and avoid the devastation of mass unemployment.”

The Prime Minister signed off on additional lockdown measures in a meeting last night, which will see pubs and restaurants close in northern England from Monday in response to the marked increase in Covid cases.

The government is reportedly set to announce support alongside the new measures, as businesses are being required to close just three months after Boris Johnson ended the national lockdown and reopened hospitality venues.

Asked today about the possibility of further financial aid, the Prime Minister’s spokesperson said: “If we do have to take further steps [on restrictions], then of course we will take seriously how we can support those businesses that are affected.”

The TUC has today reiterated its call for the Prime Minister to convene a national recovery council with businesses and unions. On its plans for a new local furlough approach, the organisation has proposed that:

    • “Businesses that are required to close should be able to put workers on a new local furlough scheme. This new scheme should be allowed to run on for the duration of additional restrictions in that area, and be withdrawn gradually as restrictions ease. The scheme should be run nationally, and should mirror the original job retention scheme, reimbursing employers for 80% of the wages of their workers;
    • “Businesses based in local lockdown areas that are affected by low demand but not required to close should be eligible for an enhanced local job support scheme, giving financial assistance over and above the national scheme. There should be no requirement to work a minimum number of hours. And the government should cover 60% of wages for non-working time, with the employer covering 20%; and
    • “The government should also consider how to ensure self-employed workers do not miss out on necessary support, for example, by increasing the payments rate of the self-employment income support scheme round three from 20% to 60% of taxable monthly profits for those who can demonstrate renewed reductions in demand as a result of additional local restrictions.”

Labour welcomed a “U-turn” by the government in September as Chancellor Rishi Sunak announced that a new jobs support scheme would replace the existing furlough scheme ending this month.

The new programme will see eligible employees – those working at least one third of their normal hours – have their worked hours paid by employers and their hours not worked paid jointly by the government and their employer.

For the time that workers are not working, the government said it will pay a third of the workers’ usual pay and the employer will pay another third of their usual pay. Those eligible will be paid 77% of their usual pay in total.

O’Grady offered support to the Chancellor’s winter economic plan, which included the new scheme, along with the CBI director general Carolyn Fairbairn, but trade unions expressed reservations about the support being provided.

The federation of trade unions has also today repeated its demand that the government ensure everyone is eligible for statutory sick pay and raise the level of the benefit to that of the real living wage, which is currently £320 per week.

Both Labour and the TUC have highlighted the large number of people unable to self-isolate as they do not qualify for sick pay and warned that this is undermining the national effort to fight the spread of coronavirus.

The government announced in August that those who contract the virus and need to self-isolate would receive £132 for a 10-day self-isolation period, while others who have come into contact with them will receive £182 for 14 days of isolation.

But the benefit is only payable to those already on Universal Credit or in receipt of working tax credits. Critics have pointed out that there are lots of low earners in low-income households not on UC – e.g. large numbers of young single people.

O’Grady at the time slammed the new benefit as “paltry”, declaring that it would not make the difference needed. She added: “The sooner government gets on with delivering fair sick pay for everyone, the quicker we will beat this pandemic.”

The payment is lower than the level of statutory sick pay, which is an income that the Health Secretary Matt Hancock himself admitted in March that he could not live on. The UK has one of the lowest sick pay rates in Europe at just £95.85 a week.

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