Trade unions have won an important victory for workers after the government extended its furlough scheme to October.
Chancellor of the exchequer Rishi Sunak also disowned offensive claims that workers had become addicted to the scheme which launched in March when large parts of the economy shut down due to the coronavirus pandemic.
The Job Retention Scheme allows employers to put workers on temporary leave while giving them a government grant of 80 per cent of their wages (up to £2,500). The organisation can top this up to 100 per cent.
After the TUC and others had warned that the government needed to act soon to extend the scheme to stop job losses, the chancellor said yesterday that it would continue unchanged until July and workers would continue to get at least 80 per cent of their wages for another three months after that.
Crucially, the chancellor answered TUC calls for greater flexibility in the scheme by announcing that, from August, organisations could have furloughed workers back part-time to restart their businesses.
Currently workers must do no work for their employer for a minimum of three weeks.
This could all help to safeguard millions of jobs with 7.5 million jobs currently on furlough, including for those caring for dependents and those shielding due to serious health conditions.
However, it is not enough on its own to prevent 1980s-style mass unemployment with all the devastating implications for people and communities.
The government still needs to take urgent steps to improve social security pay-outs and put in place measures to support unemployed workers.
Today’s news comes after an anonymous government source claimed that “people are addicted to the scheme”.
The government had also mulled cutting support to 60 per cent of wages and reports swirled of support being limited to certain sectors or parts of the UK.
The chancellor said he did not agree with the word “addicted” and that nobody wanted to be on furlough.
Full details of how the extension will work will be published by the end of the month. These will be scrutinised by the TUC and affiliated unions.
By putting in place a long extension, the government has lifted the regular fear that as the deadline nears, nervous bosses will start executing redundancy plans.
But there are still worries.
Notably, the government has left room to cut the level of grants going to businesses. It is vital that if it pursues this route that it does so extremely carefully to ensure that jobs are not lost.
The scheme must continue to protect those who cannot work, including those who are shielding or caring for someone shielding, parents who cannot work while schools are closed, and those who are ordered to self-isolate.
And it would be welcome if the ability to work part time on the scheme could be introduced before August.
Meanwhile, the government needs to work on two gaping holes in its coronavirus response.
One is the paltry level of support provided to those who find themselves relying on social security.
The rate of Universal Credit and legacy benefits – should be lifted to £260 a week. That’s equivalent to the value of 80% of weekly earnings on the national living wage.
We’ve already seen 2.3 million individual Universal Credit claims – more than five times the usual levels – since the lockdown started on 16th March.
But people facing debt and destitution can’t effectively prepare for work. We also need a jobs guarantee for the long-term unemployed.
This country, like many others is in a fight against widespread unemployment, with its devastating and long-lasting impact.
The extension of the Job Retention Scheme is an important weapon in that battle but it is only part of the armoury we need to safeguard people’s livelihoods and the economic future of this country.