Toggle high contrast
Rishi Sunak and Boris Johnson
i
Getty/WPA Pool

Coronavirus help: what workers need now

Published date
The government must put money in workers’ pockets to help them through this crisis. Here’s how.

The coronavirus pandemic poses huge risks to health, jobs and livelihoods of a kind unseen outside wartime.

Restrictive measures to contain the spread of the virus have already had a chilling effect on the UK economy, with tens of thousands of jobs now at risk.

Last night, the Chancellor announced a package of measures to try to protect businesses from the shock.

But workers need more.

At present, too many face tough choices about whether they can afford to follow public health advice and stay at home, and tough prospects as businesses struggle to cope with reduced cash flow and demand.

In his speech yesterday, the Chancellor said that he’d be working with trade unions on a support package for working people.

Unions stand ready to work with government to do everything we can to protect health, jobs, and livelihoods.

In a report published today, we've set out five key are where we want the government to take action to help workers through this crisis. They are:

1. Ensure that business support measures are conditional on support for jobs

In his speech, the Chancellor announced a package of support for business, including an initial £330 billion of loan guarantees, support for business rates, cash grants for smaller businesses, and the ability to reclaim the costs of coronavirus related statutory sick pay.

While these are positive steps, business support must ensure that earnings are protected.

Our key demand is that government provide wage subsidy schemes to support people in jobs, building on best practice across Europe. We’ve seen similar schemes in countries such as Denmark, Norway and Austria (there’s more detail in the report on how these schemes work).

We know that government has the mechanisms in place to get money direct to workers. It’s time to act now.

To ensure that government resources have the greatest economic and social impact and support the highest number of citizens, businesses and employers should set out Jobs and Fair Wages Plans, agreed with recognised unions.

2. Fix the sick pay system to provide sick pay for all

Our sick pay system is broken. At a maximum of £94.25 per week, Statutory sick pay (SSP) is not enough to live on. The average worker earns £512 per week, so for the estimated 7 million people who rely on SSP, any time off work will be a large income shock.

As well as this, many people aren’t eligible for SSP. Just under 2 million people miss out on SSP due to not earning the lower earnings limit of £118 per week. Women, those in insecure work, and younger and older workers are most likely to miss out.

Rather than extending eligibility for sick pay to those who don’t earn enough to qualify, at last week’s Budget the Chancellor told them to turn to the benefit system instead.

And while he announced minor improvements to the way the system works, the benefit system still isn’t fit to provide the support people need, due to the five-week wait for first payment and the low level of benefits (Employment and Support Allowance is just £73.10).

This why the government must remove the lower earnings limit for qualification for sick pay. It also needs to urgently increase the weekly level of SSP from £94.25 to at least the equivalent of a week’s pay at the Real Living Wage.

As well as this, we reiterate our calls to end the five-week wait for benefits, and significantly increase social security payments.

3. Introduce targeted support for parents who need to take time out of work to care for kids

Schools are currently implementing government advice that children stay home for seven days if they have a cough or cold symptoms.

Many parents and carers are therefore already having to take time off to care for children. Many more will need time off when, as looks inevitable, schools close.

To deal with this, the government must introduce emergency measures that guarantee paid parental leave for one primary carer for the duration of the school and nursery closures, with government reimbursement for employers.

To make sure this is effective, government must ensure protection from unfair treatment or dismissal for parents who take up this leave, no matter how long they’ve worked in their jobs.

These measures should apply to all working parents and carers, including those in part-time, agency or insecure work and those who qualify as self-employed.

4. Provide more help to families – and a stimulus to the economy

The coronavirus has come at a time when household budgets and the wider economy are already fragile.

From a macroeconomic perspective, the size of any stimulus must go as far as possible to match the likely shortfall in economic activity, taken across the crisis itself and the aftermath.

This is obviously difficult to judge, but some have suggested the decline is currently proceeding at an (annualised) pace between 10 and 20 per cent.

At the household level, even without the pandemic, the UK was already tinkering closely to a household debt crisis. The income shocks caused by coronavirus could mean, without intervention, many people being pushed into problem debt, or even further into problem debt.

This is why ensuring business support packages are conditional on support for jobs, providing paid parental leave, and fixing our broken sick pay system are so important.

But alongside this we need more measures to protect household finances.

These include a fully-funded freeze on council tax payments (including council tax debt payments), a significant increase to the recently announced £500 million hardship fund, immediate increases to social security payments, an end to the five-week wait for Universal Credit, and support for renters, not just those with mortgages.

5. Bring together a taskforce of unions and employers to help co-ordinate the national effort.

Ultimately, a co-ordinated and sustained intervention is needed to ensure that the economic and health impacts of the coronavirus pandemic are minimised.

The Chancellor has said he’ll talk to us, but what we need is a taskforce that brings together unions, business and government to co-ordinate support and ensure that measures are being effectively, targeted, delivered and accessed by those who need them.

The taskforce should also oversee a similar co-ordination effort in individual sectors and industries, bringing together employers and unions in key sectors including manufacturing, retail and transport, to design and deliver the support that workers and employers need.

Enable Two-Factor Authentication

To access the admin area, you will need to setup two-factor authentication (TFA).

Setup now