PM told to extend furlough - or risk opening job loss 'floodgates'

Unite GS Len McCluskey writes to prime minister Boris Johnson urging action on furlough scheme

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Pressure on the government to extend the successful furlough scheme – which kept more than 9m people on company payrolls at its peak at the height of the coronavirus crisis – continues today, (September 16) 45 days before the scheme is slated to end.

The furlough scheme, also known as the jobs retention scheme, began in March in order to avert a jobs loss crisis, and entailed the government paying 80 per cent of the wages of people who could not work amid a nationwide lockdown and a subsequent and on-going crash in consumer demand.

The scheme has slowly wound down over the last several months, and is scheduled to end abruptly on October 31. Calls from trade unions, businesses, economists, and politicians alike to extend or modify the scheme have so far fallen on deaf ears.

Even before the end of the scheme, already hundreds of thousands of jobs have been lost – since March it is estimated that nearly 700,000 people have fallen off company payrolls, and it is feared that 400,000 more jobs could go by the end of September.

Chancellor ‘should carefully consider’ furlough extension

Chancellor Rishi Sunak has repeatedly said publicly that he will not extend the furlough scheme. Most recently, he told the BBC, “I wouldn’t be being honest with people if I pretended that it was always going to be possible for people to return to the job that they had.

“Now in terms of helping those people, I don’t think the right thing to do is to endlessly extend furlough.”

His stubbornness over the issue has been met by harsh criticism from all sides, with even the Treasury select committee itself urging the chancellor to consider an extension.

Tory MP Mel Stride, who chairs the committee, said last week, “The committee’s disappointment that the government did not implement our recommendations to help those who have fallen through the gaps in support persists. Our second report of the inquiry focuses on emerging challenges as lockdown measures are lifted.

 “One such challenge is to target assistance effectively at those businesses and individuals who need it. The chancellor should carefully consider targeted extensions to the coronavirus job retention scheme and explain his conclusions.”

‘Floodgates for redundancy notices’

On Wednesday (September 16), Unite general secretary Len McCluskey wrote to prime minister Boris Johnson to further press the case for an extension of the furlough scheme. Today – exactly 45 days before the scheme is set to end – is an important milestone because by law businesses must give workers 45 days’ notice of redundancy.

In his letter to the prime minister, McCluskey wrote, “This week will mark 45 days until the Jobs Retention Scheme comes to an end. With no sign yet of your government moving to extend or modify the scheme, there is the very real fear that this landmark will open the floodgates for redundancy notices as employers seek to comply with the 45 days’ notice period.”

Calling on the government to act by extending and modifying the scheme on a sector-by-sector basis, with an emphasis on short-time working, McCluskey added that such a move would “put a floor under struggling employers who are working hard to stabilise in the face of immense challenges, helping them save jobs, but it will also respect and repay the historic investment made by taxpayers and our country to avert widespread unemployment”.

Unite’s general secretary went on to highlight how other countries have committed to extending their own version of the furlough scheme.

Indeed, the German government has just committed to extending its Kurzarbeit wage protection scheme until the end 2021. Meanwhile, in France, a new short-time working scheme is set to be in place until June 2022, and in Austria, their short-time working scheme will be extended for at least another six months from October.

“With our competitor nations announcing the extension or modification of their jobs retention schemes, we ask that your government recognises the need for UK businesses and workers to receive similar support,” McCluskey continued in his letter.

He highlighted that “winter and Christmas are fast approaching” and with a second wave on the horizon, “it also indicates that any sense of ‘normal’ consumer behaviour and economic activity will not return for some time”.

SOS for Jobs

McCluskey’s letter comes just after TUC Congress 2020, held for the first-time ever online on Monday (September 14) and Tuesday (September 15). A key focus of the conference was pressing the government to extend the furlough scheme.

Labour leader Keir Starmer, who spoke at the conference, said in his speech, “I’m calling for the government to work with us. To create new, targeted support that can replace the Job Retention Scheme, and to develop this through urgent talks with trade unions, businesses and the Labour Party, so that we can deliver direct support and training to those who need it, and prevent mass unemployment.”

He urged the government to adopt “a new targeted pay protection scheme for short-time working and downtime upskilling”, one that sits alongside “a programme of industrial and company investment to safeguard industries vital to our recovery, and a job guarantee scheme for our young”.

Last week, Unite launched its SOS for Jobs campaign in its ongoing fight to secure government support for workers across industries. The campaign, launched at a rally outside Parliament, was attended by dozens of Unite manufacturing members and almost 50 Labour MPs.

As part of the campaign, Unite has released a new film, outlining why the furlough scheme must be extended with additional government support to avert a full-blown unemployment crisis. You can watch and share the film below.

You can also get involved in our campaign by writing to your MP – find out more on our campaign page here.

By Hajera Blagg

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