We need a new plan to build on the Job Retention Scheme

The TUC proposes a new Job Protection and Upskilling Scheme to help save jobs. But support for business must come with strings attached.

We need a new plan to build on the Job Retention Scheme

The Job Retention Scheme (JRS), argued for by unions, has done vital work in protecting jobs.

But we now need a more targeted successor scheme to support jobs in key industries and give people the skills needed for the future.

The original furlough scheme has supported the wages of 9.6 million people in total, with over 6.8 million people still supported by the scheme at the end of June.

Government action is needed to prevent mass unemployment

The threat of mass unemployment is still with us.

The Bank of England estimates that unemployment could rise to 7.5 per cent by the end of the year, leaving 2.5 million people out of work. The National Institute of Social and Economic Research estimates that unemployment could reach ten per cent.

It’s clear that the Job Retention Bonus proposed in the Chancellor’s summer statement – a £1,000 payment for companies who bring furloughed workers back to their previous jobs - isn’t enough to stop millions of people losing their livelihoods.

We know that in previous downturns, young people and those who face structural discrimination in the workplace - including Black and disabled workers - tend to lose work first.

This isn’t inevitable. Government action can get people back to work, support jobs and prevent the threat of mass unemployment.

But this support should come with strings attached. We must use this moment to upskill our workforce, prepare for the jobs of the future and build a fairer labour market that offers decent work to everyone.

A new short-time work scheme can save jobs and boost skills

The TUC is proposing a new Jobs Protection and Upskilling scheme, building on lessons of the Job Retention Scheme (JRS) and best practice from across Europe.

It was right for the JRS to be available to all businesses. But now we need more targeted support.
Our scheme would provide businesses with 70 per cent of wages and associated costs for those hours a worker is not working. But they would have to show that:

  • they’ve been affected by coronavirus restrictions.
  • they have brought back each worker they’re claiming for a minimum period of their normal working time – with exceptions for local lockdowns or for workers who are shielding or can’t work because of caring responsibilities.

Workers would continue to receive 80 per cent of their wages for their non-working time – up to the same cap of £2,500, as in the JRS.

We know that workers on the minimum wage have faced real hardship while on furlough – so their wages should not fall below the legal minimum for their normal working hours.

Self-employed people, including those who have missed out on previous support, should also receive support.

Upskilling for the future

Not everyone will be able to return to their full working hours. So we should use this non-working time to provide workers with the skills they need for the jobs of the future – in green industries, in new public services and beyond. The new scheme would provide every worker working less than 50 per cent of their normal hours with an offer of funded training, brokered through the National Retraining Partnership.

Conditions for business

The government needs to support businesses to stop the threat of mass unemployment becoming a reality. But this support should come with new conditions designed to promote decent work. Our scheme would require businesses accessing support to:

  • set out Fair Pay Plans -including limiting the ratio between the pay of the CEO and the lowest paid worker and ensuring everyone is paid at least the real Living Wage
  • establish a plan for decent jobs, including allowing trade unions to access their workplace where a collective agreement is not already in place, and no use of zero hours contracts
  • pay Corporation Tax in the UK
  • commit to not make redundancies and not pay dividends while using the scheme

A new jobs protection and upskilling plan can offer real opportunity to working people, save viable businesses, and help deliver the transition to more decent work the UK desperately needs.

Unions
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Kate Bell

Kate Bell is the Head of the Rights, International, Social and Economics department.

The Department leads the TUC's work on boosting employment rights, promoting social and economic policies that benefit working people, and building international solidarity.