Let employers reduce workers’ hours instead of making them redundant
It is not as if economic pain can be seen as a sacrifice to protect public health. We have the highest level of excess deaths in Europe
German employers can reduce workers’ hours in tough times instead of making them redundant – a solution that could save jobs in the UK
Yesterday the UK officially entered recession for the first time since the 2008 financial crisis, and more deeply and severely than any time on record. UK GDP fell by more than a fifth (20.4 per cent) in the last quarter alone.
We are of course living through unprecedented times. Every country in the world has been hit by the coronavirus and had to cope with the health and economic implications of the pandemic.
Labour has acknowledged this and acted as a constructive opposition, but it is clear that our Government’s handling of this crisis compares dismally to its international counterparts.
Confirmed figures over the same period show the French economy shrinking by 13.8 per cent, Italy’s by 12.4 per cent and Germany’s by 10.1 per cent. The UK is also an outlier among other G7 nations, with the US suffering a 9.5 per cent fall in GDP and Canada provisionally dropping by 12 per cent.
It is not as if this economic pain can be seen as a sacrifice made to protect public health. As well as these bleak economic figures, we currently have the highest level of excess deaths in Europe. That is a double tragedy for the British people, and it has happened on Boris Johnson’s watch.
It didn’t have to be like this. These outcomes are the result of poor political choices by Boris Johnson and his ministers. It is his Government that has been consistently too slow in getting the health crisis under control, his Government that has consistently failed to get a “test, trace and isolate” system up and running, and his Government that is persisting with plans for a blanket removal of income support for businesses when many haven’t even reopened and others are going back into local lockdowns.
It is just over a month since Rishi Sunak, the Chancellor, unveiled his alternative “plan for jobs” to Parliament.
This was the perfect opportunity to present creative solutions to protect jobs through the next stage of this crisis. That does not mean extending the Coronavirus Job Retention Scheme indefinitely – Labour has never called for that – but instead reforming it so that wage support is targeted to the worst-hit sectors of the economy. I urge Mr Sunak to look to the examples of countries like Germany, where a permanent short-term work programme known as Kurzarbeit has been in place ever since the global financial crisis.
German employers can reduce the hours of workers when times are tough, instead of making them redundant – exactly the sort of innovative solution that could save many jobs here in the UK.
Unfortunately, the Chancellor isn’t listening.
Instead of targeted action to save jobs, we got the one-size-fits-all withdrawal of wage support and a gimmicky “bonus” scheme that risks handing over too much public money to businesses that were planning to bring people back to work anyway.
The shortcomings of such a blanket approach are already plain to see.
More than 20,000 jobs have been axed or threatened since Mr Sunak took to his feet on July 8. One in three firms say that they expect to make redundancies between now and September.
There were already 730,000 fewer employees on the UK payroll in July than there were in March – and that’s before the worst-hit firms have had the rug pulled from under their feet with an end to the furlough scheme.
A downturn was inevitable after lockdown, but Boris Johnson’s jobs crisis was not.
The decisions that his Government takes right now will determine how and at what pace we emerge from a recession that is already deeper than it needed to be, and with what cost to lives and livelihoods. The lights on the dashboard are flashing red, but it is not too late for the Government to change course.