Continue govt support call
Furlough scheme must be extended to support struggling sectors – Unite, industry and MPs agree
Steve Turner, Unite assistant general secretary, said extending the furlough scheme would support key sectors of the economy “that are not going to return to any sense of normality, whatever that may look like”, while shadow chancellor Anneliese Dodds MP said that just because extending it “may be difficult for some politicians doesn’t mean it shouldn’t happen”.
“Yes, there will be costs in making the system more flexible for the future, so it reflects sectoral differences, but there’s also a cost in not doing it,” she said. “I’ve asked the Chancellor for his modelling around the impact of our ‘one size fits all’ approach to the furlough scheme and the self-employed scheme on unemployment, because we know it’s very costly in the long term, particularly given it will be concentrated in areas that will be difficult for people to move into other work. We do need a different approach.”
Stephen Phipson, of manufacturing industry body Make UK, said there was “absolutely a case for extension”, especially for sectors such as automotive and aerospace, whose return was going to take a long time, pointing out that the JRS was designed on the basis that there would be a quick economic recovery.
And Ian Wright, of the Food and Drink Federation, warned that without the furlough scheme, many hospitality industry employers would go out of business
Greg Clark MP, the former business secretary, praised the JRS and the way in which Unite, manufacturing bodies and others had worked together on the proposal for it, and suggested that, as the economy moved out of lockdown, the scheme would need to be more targeted.
“We need to recognise the reality,” Clark said. “If the furlough scheme is there to support businesses that simply don’t have the money to pay their employees and recognises that to lose them would be a big mistake, then that analysis continues to apply. So, there needs to be a successor to it, whether it’s by sector or some other way of supporting businesses.”
The webinar, joined by over 250 representatives from Unite, manufacturing companies and employer bodies, was chaired by the Financial Times’ chief political correspondent Jim Pickard.
Discussing the urgent need for an industrial strategy to enable the UK economy to recover and rebuild out of the crisis, Anneliese Dodds said the pandemic had revealed a serious lack of industrial coordination.
Trade unions, business groups and others had “stepped into the breach” and manufacturers had delivered a “huge push” to make ventilators and PPE, but there was an absence of the joined-up approach that is vital for the future of our economy.
“This is as important to our future as a low carbon, through to zero carbon, economy. If we don’t have that coordination, we won’t be able to harness the possibilities for carbon capture and storage, the use of hydrogen power for fully connected and integrated community energy, and so much else that is necessary for the future of our economy.”
Dodds called on Chancellor Rishi Sunak to focus on using the “tools at our disposal” – British manufacturers – when it came to procurement policies.
“For many years there have been major projects that have been announced but we haven’t seen the impact of in terms of jobs feeding through to our communities. We’re anticipating there will be a Budget statement over the next couple of weeks and there may be investment plans put forward. I’ll be saying to him that he needs to be focused on the impact these schemes will have on high quality employment. We need to make sure they are involving British manufacturers. These are tools at our disposal and are being used by many EU countries.
“Let’s learn from countries such as France and Germany, where investment in defence and in space is already being brought forward,” she said.
Steve Turner repeated Unite’s call on the chancellor and prime minister to now build a broad alliance with the establishment of a National Council for Recovery.
The time is now
“If ever there was a need for our nations, our devolved governments and our central government, to come together on a cross-party basis, with industry, mayors and trade unions to talk about what sort of economy we need, it is now.
“It’s not just as we come through Covid19 – we can rebuild and we can recover from this pandemic. But we have to plan for our future, how we green our economy, and to think about a just transition.
“We don’t leave communities or workforces in sectors that we know will transition [to green jobs], behind. We need to support them and have a 10 to 20-year plan and to carry communities with us, with the voice of working people at the forefront of that debate,” he added.
There was remarkably broad consensus among panel members. Greg Clark called for a national partnership, including with trade unions, on how we can develop a strong, national economy and dependable skills.
Ian Wright of the Food and Drink Federation said that the food industry had come together with the trade unions “too late” and praised the work unions and employers had done together in making workplaces safe.
“This played a big part in enabling the industry to switch production from producing 70 per cent of our food for retail, to almost 100 per cent going into retail,” dealing with the empty shelf issues at the beginning of the pandemic. “I’m very proud of what the industry and our colleagues in the trade unions have achieved”.
He said we should “build on that collaboration” and praised Anneliese Dodds’ approach, saying that active engagement by the government in the economy over the long term was necessary.
“We need to think quite deeply about how we finance our manufacturing industry going forward. What we don’t want is a series of distress purchases which will set those businesses up for further failure. Which is why I really like the idea of government converting some of its loans to equity – taking stakes in businesses to set them up for success and let them go forward,” he concluded.
By Jennie Walsh @Jennie_Walsh