With the Government’s Coronavirus Job Retention Scheme due to end on 31 October, the Chancellor today announced further economic measures to support workers during the COVID-19 pandemic.
Trade unions including Unite, PCS, GMB, Usdaw, Bectu and UNISON have responded to the Chancellor’s ‘Winter Economy Plan’ today.
Rishi Sunak today announced that the furlough scheme will be replaced by the “jobs support scheme”, which will subsidise a part of a workers’ salary. Under the scheme, British workers will need to work at least a third of their normal hours to qualify – which will be paid by their employer as normal.
Of the remaining two-thirds of each worker’s normal pay, the employer will pay 33% and the government will pay 33% so that the worker receives 77% of their usual monthly wage in total. In total the government will therefore be subsidising 22% of the workers’ pay and the employer will pay 55%.
The new scheme is aimed at encouraging businesses to keep employees in a job on shorter hours instead of making them redundant, and will be targeted at businesses that need it most – all small and medium-sized firms – but only for big companies if turnover has fallen by a third.
The Chancellor also announced that a grant for self-employed workers will also be extended on similar terms to the jobs support scheme.
1/ The Job Support Scheme will directly support the wages of people in work, giving businesses who face depressed winter demand the option of keeping employees in a job on shorter hours rather than making them redundant. pic.twitter.com/Gj4HRyvdUq
— Rishi Sunak (@RishiSunak) September 24, 2020
The new measures outlined by Mr Sunak earned a mixed response from trade unions, with some praising the Chancellor while others criticised the Treasury for not going far enough.
Unite general secretary Len McCluskey “welcomed” the measures and called on employers considering making workers redundant to now step back from the brink. He said: “The package of measures announced today by the chancellor will allow many workers and employers to breathe more easily.
“For some industries this will steady the very rocky floor beneath them, something that we have been pressing for all summer in an effort to stop the redundancy floodgates from pouring open.
“The chancellor has heard the incessant calls from unions, economists and business leaders and listened, and that is to be undoubtedly welcomed…
“…While we await the detail of criteria for large employers’ access to the scheme, there can be no doubt that in the UK’s strategically vital industries – such as aerospace, steel and automotive – today’s move to support wages means we stand a better chance of saving the jobs and skills needed to power the recovery.
“We call upon employers to now work with us on the urgent task of saving those jobs. Reverse plans for redundancies and reflect on the opportunities now available to us: do not push the redundancy button. Unite’s officials stand ready to work night and day with you to keep people in work and earning.”
PCS general secretary Mark Serwotka also welcomed the new support, but also warned that it may not be enough to prevent job losses. Mr Serwotka said: “Any support for jobs and key industries during this unprecedented global pandemic is to be welcomed. However, the Chancellor’s measures are akin to using a plaster to cover a gaping wound.
“Our members in the commercial sector, aviation and culture are already being threatened with hundreds of redundancies, as employers seek to capitalise on the economic fallout from Covid-19.
“No one should be losing their job due to the coronavirus pandemic and that is why the furlough scheme should be extended.
“The Tories ideological opposition to increased state intervention is hurting the economy and costing people their livelihoods right now.”
GMB action general secretary John Phillips criticised the Government for not acting soon enough and called on employers to halt any planned redundancy processes and review their position based on today’s announcement. He said: “It’s absolutely vital there is targeted support for jobs – it’s come late in the day, it was always completely untenable to allow the economy to fall off a furlough cliff edge.
“Whether this is enough to stave off widespread redundancies depends very much on the detail, and it will be judged not just on jobs but on people’s living standards and ability to pay the bills.
“GMB is calling on all employers who have redundancies planned to halt those processes and reassess based on this announcement. If bosses won’t do that, the Government must step in.
“It’s incredibly disappointing not to see much bolder, forward-thinking action.”
Usdaw general secretary Paddy Lillis raised the issue of the problems facing the retail sector and criticised the Chancellor for failing to provide a plan to give targeted help to the retail industry. Mr Lillis said: “We are pleased that the Chancellor has eventually stepped back from the cliff-edge ending of the jobs retention scheme and we will study the details of the new jobs support scheme. However we are very disappointed that he made no mention of the deep difficulties the retail industry faces.
“The coronavirus pandemic has had a profound impact on retail. So far this year 125,000 jobs have been lost in retail and 14,000 shops have permanently closed. The Chancellor today needed to demonstrate the government will work with unions and employers on an immediate recovery plan that will give targeted support to retail.
“High streets need radical and bold action to level the playing field between online retail and ‘bricks and mortar’ shops. The time is long overdue for the government to look seriously at introducing some form of online sales tax.”
Head of Bectu Philippa Childs accused the Chancellor of ignoring the creative industries, saying: “Despite the damage suffered by the creative industries during the pandemic, it is clear that the Treasury has once again overlooked their needs.
“The Job Support Scheme may help some employers, but it will not help to save theatres that are still not able to open due to government restrictions and are already making thousands of workers redundant.
“And the army of freelancers and self-employed who make up the backbone of the UK creative industries face being excluded from support once again as the Chancellor continue to turn a deaf ear to their hardship.
“Without more support the UK creative sector will not get through the winter, we desperately need a targeted plan to save jobs and ensure that one of the most productive parts of our economy can survive the winter.”
UNISON general secretary Dave Prentis said: “These measures show the chancellor has been listening to unions and businesses. Supporting the wages of workers is an important first step in the battle to protect jobs across the UK.
“A strong economy is vital to maintaining precious public services. The pandemic’s shown that it’s vital public services that hold our society together. They must be protected.
“Fixing the flawed testing system and providing full sick pay for all are also key to keeping the economy moving.”