Working with unions and employers, the government has put in place the Job Retention Scheme and self-employed income support schemes, protecting the jobs and incomes of millions of workers during the coronavirus crisis.
But more is needed, and fast. Without further bold action from government, we risk huge losses of jobs and livelihoods and possibly the deepest recession since the 1930s. The OECD estimates that unemployment could hit 11 per cent this year. But this is not inevitable, and action taken now can prevent the despair of mass unemployment.
Economic history shows that investment is the most effective way to deliver growth after a recession and restoring growth is the fastest way of restoring public finances. We failed to learn this lesson in 2010, and have paid a bitter price. Our weakened social infrastructure and insecure labour market created by years of austerity and deregulation have increased the impact of coronavirus, facilitating its spread and hampering its cure. And the last recession held back progress on tackling the inequalities that scar our labour market, with BME workers and disabled people seeing some of the sharpest impacts. This time must be different.
That’s why the TUC is publishing a new report setting out the measures we need to support the economy now and avoid a long and deep recession in the future.
Investment to create green jobs
First, we need the government to bring forward at least £85bn of infrastructure investment, targeted at job creation and moving the economy towards net zero carbon emissions. Our report sets out some options:
Investment in these projects, all of which will create significant economic, social and environmental benefits, will pay for itself over time by creating jobs and boosting growth and tax receipts.
Dangerous times require strong measures. Other governments recognise this – for example, the German government has announced a stimulus of 130 billion Euros, amounting to 3% of GDP over 2 years. We need our government to make this kind of commitment too.
Targeted sectoral support packages that promote good jobs
Different sectors are facing very different conditions, both now and into the future. This means their needs are different and they will require varying support strategies.
We need to establish sectoral recovery panels of trade unions, government and business to pool their knowledge and set out sectoral route maps that look ahead to the likely scenario for each sector in the months and years ahead. Based on these, packages of support targeted to each sector can be developed.
Areas that would benefit from a sectoral approach include:
Support for individual businesses in the form of equity stakes
Much of the existing support for individual businesses has been in the form of loans, but many businesses are reluctant to take on more debt. In addition, it is vital that there is a public interest return for the investment of public funds raised largely from taxes paid by working people.
For large and medium-sized businesses, government support should take the form of equity stakes, conditional on companies improving their business models. Companies that receive support must commit to:
Fixing our safety net and promoting equality
These measures aim to protect jobs and promote decent work. But we also need to strengthen our safety net and ensure that no one falls through it. To do this we need:
We can stem the tide of job losses and build back a better economy with decent work at its heart. Government action must be ambitious, far-reaching and fast.
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