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‘Millions hanging by a thread’

Chancellor, avoid the sharp right-turn – it leads to mass unemployment, writes Unite GS Len McCluskey 
UniteLive, Thursday, May 28th, 2020


Protecting one man’s job is preoccupying government at the moment, but here at Unite we’re much more concerned by the millions of others hanging by a thread. 

 

At a time when the government should be setting out the next phase of the urgently-needed programme to prevent mass unemployment, much of the cabinet is bogged down in the defence of the indefensible.

 

My appeal to Rishi Sunak is to cut loose from this irresponsible use of government efforts because there is no more time to lose in averting a jobs loss tsunami this summer.

 

The Job Retention Scheme (JRS) was a major victory for trade unions and a recognition by the Chancellor that without state intervention and pay protection, market forces would lead to mass lay-offs as employers moved towards lockdown in the face of the global Covid-19 pandemic.  

 

Among his considerations were the very real potential for huge unemployment and the probability that, overnight, millions of wage-earners would be forced to swap a decent wage for poverty-inducing financial ‘support’ from an already failing universal credit system.  These threats have not gone away but sit on the sidelines, awaiting the mis-steps that will give them their moment.

 

Sunak took the decision that has undoubtedly protected, at least for now, millions of jobs across the economy, allowing both employees and the self-employed to furlough where necessary with at least a resemblance of immediate financial security.  It was a brave decision taken despite opposition from cabinet hawks, the free marketeers and neo-liberals for whom market forces have always ruled the roost with their own cash reserves aplenty. 

 

JRS back in spotlight 

But as we start the journey towards relaxing lockdown and talk shifts to rebuilding the economy, the future of the JRS is back in the spotlight.  Against the Cummings circus backdrop, we need government to state that job protection and creation are joint priorities along with the defence of public health, and to signal that is gets that this is the absolutely not the moment to take a sharp, ideological right.

 

Trade unions are, as we have been from the very beginning of this crisis, working night and day to secure a safe, speedy and fair recovery. It was Unite’s officials who helped negotiate the JRS, and our team is also devoted now to fending off the needless, aggressive assault on 42,000 British Airways workers launched by their own employer, just as we are striving to persuade the government to provide the urgently-needed investment in our strategically vital industries.

 

Support for our proposal for a National Council for Recovery, which has so far fallen on deaf ears in Number 10, is growing among the business community as the realities of the need for the country to come together at this time of national emergency sink in. The ideologues opposing it must stand aside, acknowledging that there is no quick fix to this crisis and the failed old economics, including passing the costs down the chain to the people, have no place in these vastly changed days.

 

Above all, at this juncture it is vital that changes to the JRS are introduced on a phased basis and with maximum care.  This will be a political high-wire act as the Chancellor balances opening up the economy with measures to nurture employer and worker confidence.

 

‘Need footings of the new recovery’ 

Speaking plainly, we now need the JRS to provide the footings of the new recovery, or there will be no hope of return at all.  Short-time working, job rotation and job share arrangements – maximum flexibility to get workers back to work safely with the financial security necessary to maintain demand in the economy – will need to run hand-in-hand with JRS changes.  

 

If workers could return on, say, 50 per cent of their hours with the scheme providing a salary ‘top up’ for the remaining unpaid hours, our industries could retain jobs. The alternative for many employers will be to simply cut their cloth according to their short-term needs with working people paying the price.

 

For the vast majority of good employers, where demand has crashed and cash flow is a serious concern, introducing an employer contribution before the economy has reopened and confidence restored will leave them with few choices, leading to the mass job losses over the coming weeks that we fear. Unite is in discussions with Treasury officials, examining a variety of alternatives to simply asking employers to cough up, many of whom are simply not in a position to contribute.

 

A broader consideration of options, such as a reduction in the monthly cap – currently £2,500 – while maintaining the government’s full contribution at 80 per cent would help many: and this is not ‘free money’, those employers who can pay their fair share should of course be obliged to do so via corporate tax policies.

 

Reducing support to all or most right now is a blunt and disastrous instrument. It will lead to unemployment on a dreaded scale – much of it concentrated in those seats who gave their votes to the Tories only a few months back – undermining the JRS’s very purpose of protecting jobs and undoing the taxpayer’s historic 12-week investment to protect jobs.  

 

Don’t take that sharp right, Chancellor.  Work with those in business and the workplaces, the experts in defending and creating jobs, and you will take the right path for the people and the country.

 

This comment originally appeared in the Guardian

By Len McCluskey, Unite general secretary @LenMcCluskey 

 

 

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