Today's statement from Rishi Sunak contained some welcome steps. But feel good gimmicks like £10 off your meals are not the way to meet the looming threat of mass unemployment.
Yesterday the UK was warned of unemployment rising to 11.7% - meaning 4 million people - by the end of the year. Every day we hear new announcements of job losses, from British Airways to Prêt a Manger.
The government has won plaudits including from the trade union movement for its bold and rapid action in setting up the Job Retention and self-employment income support schemes that, while far from perfect, have supported the incomes of near 12 million workers.
But, as the chancellor has admitted, the hardest part of the task begins with the return to work. Making a big deal of a phased approach, today he announced his ‘Plan for Jobs’. We have to wait until later in the year to hear the plan to rebuild.
But the only possible plan for jobs is to rebuild today. In failing to do this, the chancellor has left the threat of mass unemployment hanging over the heads of many working people.
Some positive steps
Unions have campaigned for a job guarantee scheme, and ‘Kickstart’ is a good first step. Young workers, overrepresented in the most vulnerable sectors (like retail and hospitality), face a particularly high risk of unemployment. To make it work properly, the scheme will need to offer good quality jobs with training opportunities, with regional panels in place to ensure these jobs benefit the community and employers topping up wages to the real living wage.
But the jobs crisis will go far beyond young people, and the government’s scheme does not.
A ‘job retention bonus’ in effect extends the furlough scheme, but in less generous terms. Firms will receive £1,000 for every employee that they retain for three months after the furlough scheme ends in October, as long as they pay them a minimum amount – designed to stop employers bringing back workers on very low hours. This is better than a cliff edge end to the scheme, but it won’t be enough for the hardest hit businesses. And it won’t help those workers who have shielding or whose caring responsibilities mean they can’t return to their workplace. They needed more from today’s plan.
While we heard about some new money for Jobcentres, following years of cuts, the overall package for jobs and skills support falls short. Today there was little reference to the training needs of adults, with the exception of a £1,500 employer bonus for apprentices aged 25+.
The TUC has called for a new right to retrain for everybody, backed up by funding and personal lifelong learning accounts. This should involve bringing forward the £600m promised investment in a National Skills Fund, and accelerating the work of the national retraining partnership, to ensure there is a gateway to new skills for everyone. The chancellor missed an opportunity here.
Too many gaping holes
The social and economic imperatives as we come out of the pandemic are the same.
Putting money in workers’ pockets will support spending, improve business sales and encourage them to retain workers. Businesses in the hardest hit sectors will need bespoke and substantial interventions. There was no mention anywhere in this statement of the crisis in retail, an industry on its knees with hundreds of thousands of jobs already gone and many more losses to come in the period ahead.
Where business models face major changes after the pandemic, government investment in public services and infrastructure can provide new work for those who lose their jobs. Above all, government investment in the green economy could be the foundation for a new deal worthy of the name.
Here all the government has to offer are small measures and gimmicks: a welcome but small- scale home insulation programme, some targeted changes to VAT (£4bn) and a so called “eat out to help out” discount. This is not the time for feel good initiatives but for real action.
The TUC set out a plan for how investment in infrastructure and public services could deliver millions of new jobs. Research for the TUC shows that an £85bn investment in green infrastructure could help create 1.24 million jobs in the next two years. There are over 100,000 vacancies in social care, and 100,000 more in the NHS. There have been 100,000 redundancies in the past decade in local government. But public services got nothing from today’s statement.
The TUC have calculated that to match Roosevelt’s New Deal would mean a total of £450 billion spending over the next five years. In spite of all the fanfare, the chancellor announced just £3billion for greening homes and public buildings on top of the prime minister’s so called ‘new deal’ package of only £5bn.
And the gaping holes in too many families’ budgets will remain unfilled. There was no action on the UK’s incredibly low level of sick pay, which leaves those who have to self-isolate facing huge falls in income. Nothing about the inadequate amounts of universal credit – or the five week wait to receive it. No pay rise for key workers. ”Up to £10 off” in restaurants won’t mean much to those who have been driven to food banks or only have a few pounds to feed their family a day.
Building back better
The chancellor is facing a huge challenge. But he needs to do more to meet the challenges ahead for families across the country.
The government needs to recognise that every hour put in by every worker each day – that's what our economy is made of. So everything done to protect and create jobs will pay for itself with a faster, stronger recovery.
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