News brief - 25/09/20 View this email in your browser
New Job Support Scheme under attack for weak provisions
Chancellor of the Exchequer, Rishi Sunak, dropped the Autumn Budget this year in favour of his Winter Economy Plan - an emergency set of policies designed to keep the UK afloat through a second wave of the Coronavirus.
As of today, no area in England is considered 'low risk' for the virus, as cases of the infection return to exponential growth and local lockdowns are applied at multiple local authorities across the country.
The economy, in a nascent recovery, will doubtless be victim to a new blow by the resurgence of the pandemic, only to be hit by the exit of the UK from the European Union at the end of the year.
Unions have focused on saving jobs, protecting incomes and avoiding austerity during this crisis, their most recent push being for a replacement to the Job Retention (furlough) Scheme, which is due to expire at the end of October.
In a success for the labour movement, Sunak's new Job Support Scheme loosely follows the framework set out by the TUC, but its dilution of several aspects of the programme have been widely criticised.
The new Scheme encourages short-time working, with employees brought back for a portion of their hours and furloughed for the rest. In exchange for employers retaining staff for at least 33% of their usual hours on full pay, the government will pay 33% of their normal wages for the hours they are furloughed. Employers will be required to top this up with an additional 33% of wages. This means that workers will be paid two-thirds of their normal wage for the hours they are furloughed.
While the TUC welcomed the plan as a step in the right direction, it deplored the "wasted" hours of furlough, which it said could be better used to retrain workers in skills that will prepare the workforce for the realities of a post-Brexit, post-automation and greener economy.
Unions had also pushed for workers to be paid at least 80% of their wages for the hours they are furloughed.
Shadow Chancellor Annaliese Dodds immediately raised concerns about the suitability of the scheme, decrying its lack of provision for training and questioning whether it would actually be effective at protecting jobs. Instead, the scheme's weaknesses could easily lead the UK back into 1980s levels of unemployment, she said.
Elsewhere, former Chancellor and Prime Minister, Gordon Brown, made an uncharacteristic return to the frontline to urge Sunak to "reconsider" his plan.
"There was nothing in his message yesterday for the 1.5m now unemployed and the 1m on Universal Credit looking for a job, for almost 1m young people who are outside education but don’t have a job," he told ITV's Good Morning Britain.
"Then he did something for part-time work, but he’s only paying 22% of the wages. It’ll be cheaper for an employer to keep one full-time person than two part-time people on!"
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