'Whatever it takes'?
Unite welcomes chancellor’s pledge to work with unions but says workers need direct support – now
While the union welcomed chancellor Rishi Sunak’s pledge that the government would do “whatever it takes” to support the economy during the epidemic, Unite believes Sunak’s measures announced yesterday have fallen short of what households across the UK now so desperately need.
On Tuesday night (March 17), Sunak announced a £350bn support package in addition to measures announced in his first budget earlier this month — but they only amounted to loans for businesses, with no direct help for workers.
In his speech on Tuesday announcing his latest lifeline to the economy, Sunak said “any business who needs access to cash to pay their rent, their salaries, suppliers or purchase stock will be able to access a government-backed loan or credit on attractive terms.
“And if demand is greater than the initial £330bn [for loans] I’m making available today, I will go further and provide as much capacity as required,” he added. “I said whatever it takes, and I meant it.”
Other measures Sunak outlined included extending business rates holiday to all firms in the hospitality sector — which has been especially hard hit after the government advised the public to stay away from pubs, restaurants and theatres — and providing grants of up to £25,000 for small businesses.
He also said that mortgage lenders would grant people who are suffering financial difficulty because of the epidemic a three-month mortgage holiday — although interest will still accrue and mortgage-holders are still responsible for repayment later.
After his speech, Labour MPs highlighted that the government has not gone far enough to support ordinary working people, hundreds of thousands of whom may lose their jobs amid a sharp downturn in demand, while others may not be granted liveable sick pay if they fall ill with the virus or must self-isolate. Renters too, were not given any support.
Criticised for failing to increase the rate of statutory sick pay which at present stands at only £94.25 a week, Sunak was asked whether he would be able to live on such a meagre income. He did not answer the question.
Responding to the latest financial measures announced by the government, TUC general secretary Frances O’Grady said, “The chancellor is right to provide emergency support for business. But this can’t be just a bailout for boardrooms. It has to put money in workers’ pockets too. Unions stand ready to work with govt to tackle this crisis. As always our priority is protecting jobs and livelihoods.”
The TUC has also highlighted how governments in other countries have responded to the crisis with more direct financial support for workers.
In, Denmark, for example, the government has pledged to pay 75 per cent of employees salaries if companies promise not to cut staff. In Sweden, 90 per cent of workers’ salaries will be covered – half by the government and half by their employer. Meanwhile, in Germany, the government will cover 60 per cent of missing net wages — or 67 per cent if the worker is a parent.
Even the Confederation of British Industry, the trade body that represents business interests, has called on the government do to more to protect workers’ wages.
“An immediate mechanism is needed to top up wages for firms with no choice but to reduce hours for lower paid staff, so they can keep them employed and get through to the other side,” said CBI director-general Carolyn Fairbairn.
The CBI has also called for “wider whole-economy measures” such as relief for businesses on VAT and reverse National Insurance payments — where the government pays business their national insurance contributions instead of the other way around. But concerns have been raised if such relief will be passed on to workers.
Unite has welcomed that the chancellor said explicitly that he aims to work with trade unions to help support workers affected by the epidemic but remained clear that immediate action was necessary.
Responding to the chancellor’s measures announced on Tuesday, Unite general secretary Len McCluskey said, “It is abundantly clear that we need a package of measures equal to the public health and economic emergencies now upon us.
“Urgent and considerable action is needed by government to avert personal and industrial catastrophe,” he added. “Unite is pleased to have heard the prime minister and chancellor say very clearly that they `will do whatever it takes’ to protect public health and the economy’s health. We will hold them to that.
“However, we remain extremely concerned that workers’ and individuals’ own capacity to act on the public health advice will remain seriously compromised because the direct economic support has not yet been provided by government. This must change and urgently. Providing wage support and covering rents must be a priority,” he went on to say.
Commenting on three-month mortgage holidays, McCluskey said it was the right thing for those who needed them but added, “what about the vast majority of people who rent?”
“They need to know that they can put food on the table and keep a roof over their families’ heads,” he said. “Only then will they feel able to play their part in tackling this public health emergency.”
“We urgently need for the government to introduce now the sort of measures that we have seen implemented in our competitor nations, including paying workers 75 per cent plus of their salary while they are forced to be at home as has been introduced in Denmark and Holland. UK workers deserve the same efforts and assistance.”