Tag: furlough

“Daughter of furlough”?

TUC calls for permanent short-time working scheme to protect jobs in times of economic crisis and change

  • TUC says government must build on the success of furlough – and set up a permanent scheme to deal with big disruptions to jobs in the future, like the transition to net zero, future pandemics and technological change 
  • Periods of industrial change have too often been mismanaged and led to increased inequality – a short-time working scheme would help prevent this, says TUC 
  • Union body warns of job losses amid abrupt end to furlough scheme 

The TUC is calling on the government to establish a permanent short-time working scheme as “a post pandemic legacy” to help protect working people through periods of future economic change. 

The TUC says the furlough scheme, while far from perfect, is one of the major successes of government policy during the pandemic, protecting millions of jobs and livelihoods. 

On the back of the success of the furlough scheme, the union body is urging government to build on furlough – “not throw away its good work” – with a permanent short-time working scheme to make the labour market more resilient in times of change and crisis.  

The union body adds that because of the UK transition to net zero and the increased uptake of new technology, this is “hugely relevant”.   

Case for a short-time working scheme 

In a new report, Beyond furlough: why the UK needs a permanent short-time work scheme, the TUC says the case for a short-time working scheme is clear, citing significant benefits for workers, firms and government. The union body says for workers, a short-time working scheme would: 

  • reduce the risk of workers losing their jobs in times of crisis  
  • protect workers’ incomes – particularly as short-time working schemes are usually more generous than unemployment benefits.  
  • prevent widening inequalities – protecting women, disabled workers and BME workers who tend to lose their jobs first in a recession due to structural discrimination   

And for the government, it would: 

  • protect against long-term unemployment, and the subsequent devastating impacts on communities 
  • help stabilise the economy, and encourage a faster economic recovery as workers continue to spend their wages 
  • save money, as the cost of furlough schemes is often below the cost of unemployment benefits, particularly where costs are shared with employers. 

For employers, the TUC says that such a scheme would produce significant savings on redundancy, training and hiring costs, as they enable firms to keep skilled workers on their books. 

The union body points out that the UK is an anomaly among developed nations in having no permanent short-time working scheme to deal with periods of industrial disruption and weak demand.  

In the OECD, 23 countries had short-time working schemes in place before the coronavirus pandemic, including in Germany, Japan and many US states. 

Turbulent times ahead 

The TUC predicts that the UK economy is likely to face significant risks in the future – be it from climate change and the transition to net zero, new technologies such as AI, new variants or another pandemic. All could cause unpredictable and widespread disruption in the labour market – causing big spikes in unemployment and business failure.  

The TUC cites failed attempts to manage industrial change in the past, which “left communities abandoned” and played a major role in the widespread regional inequality we see today.  

The union body says that if the government is serious about levelling up, it will put in place a permanent short-time working scheme to prevent inequalities spiralling – adding that a short-time working scheme could play a vital role in achieving a ‘just transition’ to net zero.   

Criteria for accessing scheme 

The TUC says the scheme should be governed by a tripartite panel bringing together unions, business and government, which should be tasked with designing the criteria for the new scheme. 

In designing the scheme, the TUC says the panel should take into account best practice from existing global schemes. The union body has set out the following conditions which it says must be in place for accessing a short-time working scheme: 

  • Workers should continue to receive at least 80 per cent of their wages for any time on the scheme, with a guarantee that no-one will fall below the minimum wage for their normal working hours 
  • Any worker working less than 90 per cent of their normal working hours must be offered funded training. 
  • Firms must set out a plan for fair pay and decent jobs 
  • Firms should put in place an agreement with their workers, either through a recognised union or through consultation mechanisms. 
  • Firms must demonstrate a reduction in demand – which can include restructuring     
  • Firms should commit to paying their corporation tax in the UK, and not pay out dividends while using the scheme. 
  • The scheme should ensure full flexibility in working hours. 
  • There should be time limits on the use of the scheme, with extension possible in limited circumstances. 

TUC General Secretary Frances O’Grady said: “Everyone deserves dignity and security at work. The pandemic shows how an unexpected economic shock can wreak havoc on jobs and livelihoods with little warning. 

“In a changing and unpredictable world – as we battle climate change and new technologies emerge – a permanent short-time working scheme would help make our labour market more resilient and protect jobs and livelihoods.  

“Too often in the past, periods of economic and industrial change have been badly mismanaged – increasing inequalities and leaving working people and whole communities abandoned.  

“Setting up a ‘daughter of furlough’ to provide certainty to workers and firms through future industrial change would be a fitting pandemic legacy. 

“Furlough has been a lifeline for millions of working people during the pandemic. Now is the time for the government to build on the success of furlough with a short-time working scheme – not throw away its good work.” 

Furlough warning 

The call for a permanent short-time working scheme comes exactly six weeks before the furlough scheme is set to end – the date at which employers are legally obliged to start consulting on planned redundancies with their staff.  

The TUC is warning the abrupt end to the furlough scheme will cause unnecessary job losses and may harm the country’s economic recovery. 

Recently, aviation unions have also been raising concerns about the sudden end to the furlough scheme and the loss of jobs in the sector. 

On the ending of the furlough scheme, Frances said: “The jobs market is still fragile, with more than a million people still on furlough. 

“An abrupt and premature end to the furlough scheme will needlessly cost jobs and harm our economic recovery.  

“Instead of pulling the rug out from under the feet of businesses and workers, the chancellor must extend the furlough scheme for as long as is needed to protect jobs and livelihoods.” 

Captain Martin Chalk, Acting General Secretary of BALPA said:  “The UK aviation sector is the only industry to remain effectively in a lockdown.  

“It employs about one million workers directly and ONS statistics show that 57% of remaining employees in air transport companies remain on furlough.  

“The scale of jobs at risk of redundancy when the furlough scheme ends is self-evident, yet the footprint of aviation must not be missed – one in four constituencies has over 1,000 people employed directly by aviation companies.  

“If the Chancellor chooses not to extend furlough, the effects will be felt by workers, communities and businesses right across the country.” 

Diana Holland, Unite Assistant General Secretary, said: “Aviation is crucial to the UK’s economic recovery. It needs furlough support to continue while Covid restrictions apply.

“Airports and aviation support thousands of jobs. Without support all are at high risk.” 

– The full report Beyond furlough: why the UK needs a permanent short-time work scheme is here: 

https://www.tuc.org.uk/sites/default/files/2021-08/PermanentFurloughReport.pdf

Chancellor: ‘Inspiring’ Scots get back to work after furlough

Chancellor of the Exchequer Rishi Sunak yesterday praised the “inspiring” people and businesses of Scotland during a visit to meet those supported by the UK Government’s £352 billion Plan for Jobs.

Rishi Sunak travelled to Fife, Edinburgh and Glasgow where he visited several businesses that have returned workers from furlough, held a roundtable of Scottish business leaders and saw how Scotland is creating jobs and leading our green recovery.

Around one in three jobs in Scotland have been supported by the UK Government’s support package and more than 90,000 Scottish businesses received more than £4.1 billion in loans since the start of the pandemic.

The Chancellor’s visit came as new figures released yesterday show that the number of people in Scotland on furlough has halved in the last three months, with just 141,500 jobs still furloughed.

 

Chancellor of the Exchequer Rishi Sunak said: “It’s been inspiring to hear stories of people and businesses in Scotland that are now starting to feel the weight of the pandemic lifting off them as they get back to work – our Plan for Jobs is working and it’s great to see people succeeding after a year of uncertainty.

“It’s been a challenging time but the UK Government has delivered one of the most generous packages of support in the world, protecting one in three Scottish jobs.  

“Scotland will be key in ensuring the UK’s economic success – creating jobs, powering our growth and driving a green recovery by hosting COP26 later this year.”

During the visit, the Chancellor toured the Offshore Renewable Energy Catapult Turbine in Leven, Fife. The turbine is the leading technology innovation and research centre for offshore renewable energy.

He met SMEs who have used the turbine for development and have benefitted from UK Government funding for green ventures.

The Chancellor highlighted the important contributions Scotland makes to the UK, including towards the UK’s Net Zero transition and climate change leadership on the world stage, ahead of the COP26 Glasgow conference in November.

He also conducted a roundtable with Scottish businesses in the retail banking sector at the new Queen Elizabeth hub in Edinburgh, where he thanked them for their role in responding to the pandemic, keeping call centres and banks open for vulnerable customers, and distributing many of the UK Government business support schemes.

The Chancellor went on to see preparations for the International Festival and the Fringe. The UK Government gave £1m of funding to Edinburgh Festivals this year, to help the festival promote itself digitally to a bigger audience.

He visited a number of small businesses including Liggy’s Cake Company, which was supported through the furlough scheme and is now hiring new staff.

He also visited Dynamic Earth, an award-winning visitor centre in Edinburgh dedicated to educating people about the earth and environmental issues, and met with several staff who have returned from furlough and met a group of children taking part in the centre’s outdoor activities.

NUMBERS ON FURLOUGH FALL TO LOWEST LEVEL SINCE START OF PANDEMIC

  • Almost three million people have moved off furlough since March, according to latest data
  • More than half a million people left the scheme in the month of June alone, with fewer than two million people now remaining on furlough
  • Chancellor welcomes new data while meeting furloughed employees on a visit to Scotland

ALMOST three million people have moved off the furlough scheme since March as the economy began to bounce back and businesses reopened, according to new statistics.

Figures published yesterday which cover up until the end of June, show the fewest number of people on furlough since the scheme launched in March 2020, down from a peak of nearly nine million at the height of the pandemic in May last year.

1.9 million people remained on the scheme by the end of June, more than half a million fewer than the 2.4 million at the end of May.

The Business Insights and Conditions survey (BICS) shows numbers may have fallen even further – with estimates that between 1.1 and 1.6 million people are still on furlough.

It comes as the Chancellor visited Scotland where he has hailed the economic strength of the union and where the Government’s Plan for Jobs has supported businesses and families during the pandemic.

Ahead of meeting Scottish businesses and individuals in Edinburgh, Glasgow and Fife, where he talked to employees who have returned from furlough, Rishi Sunak welcomed the statistics.

Chancellor of the Exchequer Rishi Sunak said: “It’s fantastic to see businesses across the UK open, employees returning to work and the numbers of furloughed jobs falling to their lowest levels since the scheme began.

“I’m proud our Plan for Jobs is working and our support will continue in the months ahead.”

The figures also show a striking fall in the number of young people on furlough, who for the first time ever, no longer have the highest take-up of the scheme.

In the last three months, younger people have moved off the scheme twice as fast as all other age brackets, with almost 600,000 under 25s moving off the scheme.

Jobs in sectors including hospitality and retail are now also moving off the scheme the fastest, – with more than a million coming off the scheme in the last three months.

This decline means those in hospitality and retail no longer make up the majority of all those on furlough.

Furlough was extended until the end of September to allow for businesses to adjust beyond the end of the roadmap and to bring people back to work.

Starting on 1st August, the employer contribution to furlough costs will increase to 20% and that contribution level will continue until the scheme ends at the end of September.

The Government’s Plan for Jobs continues and is still in place to provide support, including Kickstart, traineeships and more work coaches to help people find jobs.

The government says this ‘is is the right thing to do’ to reduce long term economic scarring in the labour market and our ongoing Plan for Jobs means that we will continue to support people as the economy recovers.

Plan for Jobs: Numbers on furlough halve in three months

More than one million workers came off furlough in the four weeks between the end of April and the end of May, which coincided with the start of restrictions being lifted and non-essential retail, restaurants and pubs reopening.

  • Latest government statistics show more than one million workers came off furlough in May alone
  • Milestone moment as the lowest amount of people on furlough since the pandemic began
  • Comes as scheme begins to wind down ahead of closure in September

More than one million workers came off furlough in the four weeks between the end of April and the end of May alone, which coincided with the start of restrictions being lifted and non-essential retail, restaurants and pubs reopening.

New figures published today show 2.4 million people moved off the scheme between the end of February and the end of May as businesses reopened.

2.4 million people remain furloughed or flexi-furloughed down from a peak of nearly 9 million at the height of the pandemic in May last year.

Chancellor of the Exchequer Rishi Sunak said: “Our Plan for Jobs has supported people’s jobs and livelihoods throughout the pandemic and it’s fantastic to see so many people coming off furlough and into their workplaces with our restaurants, pubs and shops reopened.

“These figures show what we always hoped would happen – that the scheme is naturally winding down as the economy reopens, but continuing to support those businesses and employees that need our help.”

Today’s ONS Business Impact of Covid-19 Survey show numbers may have fallen even further – with estimates that between 1.3 and 1.9 million people are still on furlough.

These figures reinforce other positive signs about how the recovery is progressing. The number of employees on payroll is at its highest level since last April, business and consumer confidence have improved significantly and economic growth is outperforming expectations.

The figures show the largest reduction in the hospitality, retail and accommodation sectors, with nearly 180,000 people in pubs, bars and clubs alone returning to work between April and May.

Furlough was extended until September to allow for businesses to adjust after the end of the Roadmap and to bring people back to work.

Now, as the economy begins to reopen and demand returns, employers are being asked to contribute more and from today, they will contribute 10% towards the cost of paying for unworked hours.

This employer contribution will increase to 20% in August and September, before the scheme closes, with the Plan for Jobs still in place to provide support, including traineeships and more work coaches to help people find jobs.

New statistics for the Self Employment Income Support Scheme, also published today, show more than £25bn has been claimed to date in support for the self employed.

350,000 properties have paid no business rates for 15 months thanks to an unlimited rates relief between March 2020 and July 2021. Over 90% of businesses will now be able to benefit from a 66% reduction in business rates bills until March 2022.

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Don’t pull the plug on economic recovery by cutting support too soon, warns TUC

  • New TUC analysis shows employment in hard-hit sectors is struggling to recover from the pandemic 
  • Government should delay hiking up business contributions while Covid restrictions are in place – and extend furlough for as long as necessary 
  • Many employers are using furlough flexibly to support a gradual return to business as usual, says TUC 

The TUC has warned ministers not to “pull the plug” on the UK’s economic recovery by cutting off support for businesses and workers too soon. 

The warning comes as new TUC analysis reveals that employment in hard-hit sectors is struggling to recover from the pandemic. 

The analysis shows that just 1 in 8 (110,000) of the 790,000 jobs lost across manufacturing, retail, hospitality and the arts during Covid have been recovered. 

By contrast, nearly all the jobs lost in business services and administration – which saw a 220,000 fall in employment – have been recovered. 

The union body says ministers must provide ongoing, targeted support for at-risk industries and halt plans to increase furlough contributions for employers while Covid restrictions remain in place. 

The analysis also reveals that 6 in 10 workers currently on furlough are working in manufacturing, retail, hospitality and the arts – sectors hit hard by the continuing restrictions. 

The TUC fears that if the job retention scheme is ended too abruptly tens of thousands of additional jobs could be lost from these industries. 

TUC General Secretary Frances O’Grady said: “Furlough has played a vital role in protecting jobs and keeping businesses running during this pandemic.  

“Ministers must not pull the plug on our recovery by cutting off support too soon. 

“The government should hold off hiking up employer contributions until all restrictions have been lifted. 

“And we need a cast-iron commitment from the chancellor that he will extend furlough for as long as is needed, rather than ending it abruptly in three months’ time.  

“Working families need this certainty now – not a rollercoaster approach to protecting livelihoods.” 

The TUC highlighted that workers can only be furloughed if their employers decides to use the scheme, meaning that the scheme is well-targeted only to those businesses that need it. 

They also note that around two-fifths of furloughed staff (41.6%) are now only furloughed for part of the working week and are working for the rest of it, enabling businesses to use furlough to manage their gradual return to full operations. 

A copy of the analysis can be found here: 

https://www.tuc.org.uk/sites/default/files/2021-06/Jobs%20and%20recover…

Extra £14.5 billion for Scotland since start of Covid-19 pandemic

Scotland has benefitted from £14.5 billion of UK government funding to the devolved administrations, figures released today by the Treasury show.

The annual publication of the Block Grant Transparency shows that since the start of the Covid-19 pandemic the Scottish Government has received an additional £14.5 billion, the Welsh Government an additional £8.6 billion and the Northern Ireland Executive an additional £5.0 billion.

This funding has enabled the Scottish Government to provide support to individuals, businesses and public services across Scotland in response to Covid-19 and will continue to support the recovery through 2021-22.

This comes as part of the unprecedented package of support for the whole of the UK throughout the pandemic, with £352 billion spent right across the UK on Covid-19 measures.

In Scotland this included protecting more than 900,000 jobs through the furlough scheme, £294 million in self-employment support, help for businesses and the procurement of vaccines.

Chief Secretary to the Treasury Steve Barclay said: “The UK government is fully committed to strengthening the Union and making sure Scotland has the funding needed to get through this pandemic, with £14.5 billion of additional spending over the last year.

“We’ve protected more than a million Scottish jobs and businesses with furlough and support schemes, our vaccine rollout is unlocking the economy, and our Plan for Jobs is levelling up opportunity and helping us build back better across the UK.”

Scottish Secretary Alister Jack said: “From the very start of the pandemic, the UK Government has taken unprecedented action to help people and businesses right across the country.

“That includes our furlough scheme, support for self-employed people, help for businesses, and the hugely successful UK-wide vaccine programmes.

“On top of this direct support, the UK Government has provided an additional £14.5 billion of funding for the Scottish Government. 

“This extensive support, which now enables us to look towards recovery, shows how Scotland benefits from being part of a strong United Kingdom. Never has the value of the Union been more important or more apparent.”

The UK government’s Plan for Jobs is helping to support, create and protect jobs across the UK.

The Kickstart scheme is already helping thousands of 16-24 year-olds into work, JETS Scotland is providing up to six months of targeted support and 13,500 new Work Coaches have been recruited to give tailored support to people out of work.

Scotland’s night time economy ‘on brink of collapse’

The Night Time Industries Association (NTIA) is warning of an impending unemployment tsunami, with up to 24,000 jobs thought to be at risk within weeks, as a majority of struggling night-time economy businesses have now run out of cash to pay furlough contributions and fixed costs. 

The Scottish Government released the latest Strategic Framework update on Friday, which confirmed businesses will be subject to the commercially unviable levels system of restrictions for many months longer despite all financial support being withdrawn by the end of April.

Worse still, there is no commitment or target date for the return to commercially viable trading for businesses in the sector, which is only possible when social distancing and all other legal restrictions end.

A survey this month of NTIA members confirmed the perilous state the sector is now in, with average Covid related debt reaching a wholly unsustainable £150,000 or more per premises, and businesses facing an imminent cash flow crunch.

The survey also confirmed that less than a quarter of premises have licensed outdoor areas, the vast majority are many months behind on rent or mortgage payments, fewer than a third have been able to trade viably at any point in the last year, and almost all cannot reopen or trade viably while social distancing remains.

These businesses have now exhausted financial resources. Cash reserves have been depleted, more borrowing is now impossible with no guaranteed opening dates and businesses are rapidly running out of cash to pay their fixed costs and furlough contributions.

Business insolvencies and mass job losses are now inevitable within weeks unless the Scottish Government acts urgently. The NTIA wrote to First Minister Nicola Sturgeon earlier this month highlighting the issues and requesting immediate crisis talks.

It is beyond disappointing that as yet we have had no response whatsoever.

NTIA Spokesman Gavin Stevenson said: “Our members have done the right thing, closed their previously successful businesses for the sake of public health, and gone deep into debt paying the enormous fixed costs and furlough contributions to keep staff employed for over a year now.  

“We were the first to close and will be last to open.  No sector has suffered more.  But Government have consistently taken our sector for granted and refused to engage meaningfully with our representatives.

“Many of our members have been closed for over a year now, and virtually all have suffered crippling financial losses.  In short, the money going out every month has been far greater than the money coming in, and government support has typically covered less than a quarter of this deficit.

“To add insult to injury government support has now ended while there is no end date to forced closure and other restrictions.  Scottish Government now only has two options, provide substantial and immediate additional support for as long as it is mandated that our businesses stay closed and/or operate under the restrictions that make them unviable, or provide a clear route map with target dates for the end of all legal restrictions on capacity, activity, and opening hours.  

“If neither of those options are forthcoming then our First Minister is, in effect, asking thousands of small Scottish business owners to bankrupt themselves.”

First Minister Nicola Sturgeon will make a statement this afternoon. She is expected to confirm the latest easing of restrictions will take place next Monday (26 April) and will include the reopening of hospitality, gyms and non-essential shops.

TUC calls for a ‘Workers’ Budget’

  • NEW POLL: 50% of low-paid workers have suffered income loss in the pandemic, compared to 29% of high earners
  • TUC budget submission calls for a “workers’ budget” and extension of JRS to the end of 2021

New polling, published this week by the TUC, finds that low earners are more likely than middle and higher earners to have been forced to cut spending and take on debt during the pandemic.

The poll findings (conducted for the TUC by BritainThinks) come as the TUC publishes its budget submission, which calls on the Chancellor to improve pandemic support for low- paid workers, and to invest in job protection and creation to prevent an unemployment crisis following the pandemic.

Low paid workers and the pandemic’s impacts

Over a third (37%) of workers said that their household had suffered a reduction in disposable income since the pandemic began.

This rises to half (50%) for workers with annual earnings below £15k, while it is just three in ten (29%) for workers earning more than £50k.

The lowest earners are also the most likely to have had to reduce spending and take on debt.

Percentage of workers saying that since start of pandemic they have….
Annual earnings(1) Less disposable income(2) Needed to reduce spending(3) Taken on more debt
Less than £15k50%46%29%
Between £15k and £29k35%30%18%
Between £29k and £50k33%31%20%
More than £50k29%24%18%
All workers37%34%21%

The TUC says that low-paid workers have been worse affected because:

  • Insecure work: Low paid workers are often employed on terms such as zero-hours contracts, which give them no protection when their hours of work are cut back.
  • Household budget flexibility: Workers who are already struggling on low pay have much less flexibility than middle and higher earners to reduce spending and avoid debt.
  • Hard-hit sectors: Hospitality, leisure and non-essential retail have had by far the highest rates of furlough, and they are both sectors with large numbers of low-paid workers.
  • Remote working: Middle and high wage earners are more likely to have jobs that can be done form home, meaning they can avoid the need to be furloughed and may also make savings such as their usual commuting costs.
  • Furlough is protecting incomes but can pay less than minimum wage: The job retention scheme does not have a floor, meaning that some workers receiving 80% of their wages have fallen below the minimum wage. Two million employees were paid below the minimum wage in April 2020 (compared to 409,000 in April 2019) and the majority of these were on furlough at the time.

TUC Budget submission

The TUC’s budget submission calls for a workers’ budget.

The union body encourages the Chancellor to follow the recommendations of the OECD to make greater use of fiscal policy to support the economy.

By increasing support for working people and low-income households, the Chancellor would also be using fiscal policy to protect the economy and stimulate recovery.

TUC budget recommendations include:

  • Extending the job retention scheme to the end of 2021.
  • A wage floor within JRS to prevent furlough pay falling below the minimum wage.
  • Permanent retention of the £20 per week increase in universal credit, and an end to the five-week wait for new universal credit claimants to receive payment.
  • Increasing child benefit and child tax credit and removing the two-child limit.
  • Fixing statutory sick pay by raising it to £330 per week (to match the level of the real Living Wage) and by extending eligibility to the two million low-paid workers currently excluded from SSP.
  • Raising the national minimum wage to at least £10 per hour.

The full submission includes further recommendations to invest in job creation and boost skills – including retaining the £12 million Union Learning Fund, which supports 200,000 workplace learners annually.

TUC General Secretary Frances O’Grady said: “When a crisis hits, the most exposed should get the most protection. But many low-paid workers are struggling through the pandemic on less money and with higher costs. And they are falling into deeper poverty and debt.

“Good government means stepping in to help. The Chancellor should help by extending furlough to the end of the year, with a guarantee that support will never be less than minimum wage. And last year’s boost to universal credit should be kept – permanently.

“Many of these low earners are key workers who have kept our country going. We owe it to them to build a fairer economy after the pandemic. The Chancellor should give Britain a workers’ budget next month. It should be a plan for full employment, with decent pay and job security for every worker.”

7 in 10 requests for furlough turned down for working mums

  • Over 50,000 working mums respond to new TUC survey on challenges of managing work and childcare during lockdown
  • Working mums report huge levels of anxiety and stress following school closures
  • TUC calls for an emergency temporary right to furlough for working parents – and for government to promote this new right to mums and dads

Nearly three-quarters (71%) of working mums who have applied for furlough following the latest school closures have had their requests turned down, according to a new TUC survey carried out in the past week and published today (Thursday).

The job retention scheme currently allows bosses to furlough parents who can’t work due to a lack of childcare.

But the TUC says many mums are missing out on this financial lifeline as the scheme is not promoted to parents.

The union body is also concerned some employers are refusing to furlough those who request it, leaving mums in an impossible situation where they are forced to reduce their hours at work, take unpaid leave and annual leave to cope, or leave their job altogether.

TUC survey

Last week, the TUC and campaigner Mother Pukka launched a call for evidence for working mums to share their experiences of how they are managing their work and childcare commitments during lockdown.

More than 50,000 mums got in touch – an unprecedented response to a survey of this kind.

Of those working mums who contacted the TUC:

  • Nearly three-quarters (71%) who asked for furlough had their requests refused.
  • Most (78%) hadn’t been offered furlough by their employers.
  • And 2 in 5 (40%) of all mums who replied were unaware that the furlough scheme was available to parents affected by school or nursery closures.

Impact on working mums

Working mums told the TUC they were struggling with the strain of being expected to carry out their jobs as normal, while balancing childcare and home-schooling. They were also concerned about being treated badly by their employers as a result:

  • Nearly all (90%) of those who replied said that their anxiety and stress levels had increased during this latest lockdown.
  • And almost half (48%) were worried about being treated negatively by their employers because of their childcare responsibilities.

Financial strain

Around half (44%) of mums told the TUC they were worried about the impact having to take time off work would have on their household finances.

A quarter (25%) of mums were using annual leave to manage their childcare – but nearly 1 in 5 (18%) had been forced to reduce their working hours and around 1 in 14 (7%) were taking unpaid leave from work and receiving no income.

An emergency right to furlough

The TUC says that the UK’s inadequate system of parental leave and woefully low level of sick pay is leaving parents in impossible situations, where they risk losing their job or facing a catastrophic loss of income. 

To support these workers, the TUC is calling on ministers to introduce a temporary right to furlough for groups who cannot work because of coronavirus restrictions – both parents and those who are clinically extremely vulnerable and required to shield. And ministers should clarify that furlough can be used by both private and public sector employers for these purposes.

The union body says employers should first explore with parents and those shielding whether other measures – such as offering additional paid leave, changes to working hours or other flexibilities like working from home, and offering alternative work – could help the worker balance their responsibilities, but that as a last resort, workers should have the right to be furloughed.

Ministers should encourage employers to use the furlough scheme for parents and those shielding where other arrangements cannot be made, and run a major advertising campaign so that parents and shielders understand that they can use furlough.

The TUC says this situation results from the UK’s failure to help families balance paid work and childcare. Alongside a temporary right to furlough, it is calling on the government to introduce:

  • Ten days’ paid carers leave, from day one in a job, for all parents. Currently parents have no statutory right to paid leave to look after their children.
  • A right to flexible work for all parents. Flexible working can take lots of different forms, including having predictable or set hours, working from home, job-sharing, compressed hours and term-time working. 
  • An increase in sick pay to at least the level of the real Living Wage, for everyone in work, to ensure workers can afford to self-isolate if they need to.
  • Newly self-employed parents to have access the self-employment income support scheme (SEISS).

TUC General Secretary Frances O’Grady said:“The safety of school staff and children must always come first. But the government’s lack of support for working parents is causing huge financial hardship and stress – and hitting low-paid mums and single parents hardest.

“Just like in the first lockdown, mums are shouldering the majority of childcare. Tens of thousands of mums have told us they are despairing. It’s neither possible nor sustainable for them to work as normal, while looking after their children and supervising schoolwork.

“Making staff take weeks of unpaid leave isn’t the answer. Bosses must do the right thing and offer maximum flexibility to mums and dads who can’t work because of childcare. And as a last resort, parents must have a temporary right to be furloughed where their boss will not agree.

“The UK’s parental leave system is one of the worst in Europe. It’s time for the government to give all parents the right to work flexibly, plus at least ten days’ paid carers leave each year.”

Founder of Mother Pukka Anna Whitehouse said: “What working parents have been tasked with in lockdown is not humanly possible. You’re looking at an average eight hour working day, six hour school day, 12 hours of parenting wrapped around that – that’s 26 hours in a 24 hour day. And I’m hearing daily from women who are stepping back, standing down and logging off because they’re burning out.

“Some are quitting out of choice, many not. Because who looks after kids home-schooling? Who looks after pandemic patients when out of hospital? Who takes a Tesco shop to elderly neighbours? Who runs community What’s App groups making sure everyone has everything they need?

“This unpaid labour is mainly strapped to female shoulders because – for all the International Women’s Days Sellotaped together – that’s the current working world we live in.

“One thing that can change right now is seeing the Government supporting all businesses to enable them to offer a much more flexible solution and furlough. The system needs to step up for parents before we step back to the 1950s.”

Founder and CEO of Pregnant Then Screwed Joeli Brearley said: “The parents of young children are currently being asked to either sacrifice their income or their child’s education and care; placing them in an impossible situation.

“We know that this burden is predominantly falling to mothers, and the consequences for maternal employment will be disastrous.

“What we are seeing here is a cry for help on a massive scale. Our advice lines are awash with mothers who have no idea how to care for their children and maintain their paid employment when their employer is refusing to furlough them.

“This is an emergency and if the government doesn’t step in soon there will be a generational roll back in maternal employment that will take us decades to repair.”

Workers asked to shield should not have to choose between their life and livelihood

On Monday Boris Johnson, in response to mounting evidence and calls to take urgent steps to protect the public, announced a new lockdown, the third we’ve had to date. The government must ensure that those asked to shield are able to do so (writes TUC’s Quinn Roache).

New strains of coronavirus are spreading like wildfire. 

The new strain of the virus is 50% to 70% more transmissible and levels of infections are increasing to record levels, leading to huge strains on hospitals across the country.  

Disabled people make up the majority of those who have died from Covid-19 – government statistics show that disabled people accounted for 3 in 5 covid-19 deaths. This is why it is imperative that, going into this new lockdown, disabled people who are told to shield can do so effectively.    

Impact 

This new lockdown is having a tangible impact on everyone. It impacts on many workers physical and mental health as well as livelihoods and income.  

This is particularly true of those who’ve been asked to shield. A group the government have termed ‘clinically extremely vulnerable’, which means they have a higher risk of severe illness if infected.  

Evidence suggests that in England this group is almost 4% of the population, or 1 in 25 people, and that they are disproportionately more likely to be disabled. 

Disabled workers previously asked to shield told the TUC they felt forgotten and overlooked. They told us that the first lockdown left them isolated, without access to basic needs like food and a negative impact on both their physical and mental health1.  

The government must do better this time.  

Government advice to those who should shield 

Their guidance is that those advised to shield should no longer attend work, school, college or university.  

And that they should limit the time they spend outside their home, only going out for medical appointments, exercise or if it is essential. 

Shield confirmation 

Many people asked to shield will have done so already and they and their employers will have a good understanding of how to proceed throughout this lockdown.  

However, it is important for employers and workers to understand the changing nature of the shielding group.  

Since the start of the pandemic, workers will have come on and off the shielding list as their health conditions have changed. For example, those who were newly diagnosed with cancer and are undergoing active chemotherapy would have only just be put on the shielding list.  

To avoid any confusion, everyone who needs to shield will be sent a letter by the government to confirm their shield status. However, receiving confirmation you should shield has not been a seamless process in the past. 

In the first lockdown many people who were at very high risk from the virus were not on the list of those who should shield and, as a result, did not receive a letter advising them to do so.  

Government guidance says, a GP or hospital clinician can add individuals to the Shielded Patient List if, based on their clinical judgement, they deem to them be at higher risk of serious illness if they catch the virus.  

Workers who do not receive a letter telling them shield but who think they should be on the list should speak to their clinician or GP.  

Furlough 

It is vital that workers advised to shield should stay at home to protect their health, however, being told to shield and being able to afford to do so are two different things.  

We’ve been told that although employers have access to the furlough scheme not all of them are using it so often those most at risk from the virus, are not being furloughed.  

Employers should ensure that shielding workers who cannot work from home are offered an alternative role they can fulfil from home. Failing that, shielding workers should be furloughed.  

Workers told to shield from any sector, public, private or the charity/third sector, who can not work from home but cannot return to the workplace must be furloughed. And to ensure this group’s health, the job retention scheme should be open to workers who live with someone told to shield and who cannot work from home.  

Nobody should be losing pay as a result of an existing health condition and NHS advice to shield. No one should have to choose between their life and livelihood.  

This is why the government, upon the urging of unions, has extended the job retention scheme to the end of April 2021 and which means furloughed workers will continue to receive up to 80% of their salary up to £2,500 which employers can claim back from the government. Employers can, and we believe should where they can afford it, top up wages to 100 per cent. 

The government must also make sure benefits like statutory sick pay and universal credit pay the real living wage. It must repair the UK’s safety net as far too many people, around 14 million, were already living in poverty before the virus struck. Disabled people are disproportionality effected by this as nearly half of all people living in poverty in the UK are disabled themselves or live with someone who is.   

People who lose their jobs must get the support they need to make ends meet and to get back on their feet.  

Without fixing these benefits, many risk being plunged into poverty.  

TUC recommendations 

The TUC is calling on all employers to: 

  • ensure that shielding workers who cannot work from home are offered an alternative role they can fulfil from home. Failing that, shielding workers should be furloughed. 

The TUC is calling on the government to: 

  • raise the basic level of Universal Credit for the duration of the outbreak to 80% of the real living wage – or £260 a week  
  • raise sick pay from £94 a week to the equivalent of a week’s pay at the Real Living Wage – around £320 a week. 

More than half of furloughed staff are back at work, says Resolution Foundation

Think tank Resolution Foundation economist Daniel Tomlinson says the UK Government is NOT paying nine million people’s wages. He says the number of workers currently furloughed is half this amount …

From today, employers will start contributing towards the wage costs of furloughed employees (writes RESULTION FOUNDATION’s DANIEL TOMLINSON).

This significant first step in the phasing-out of the Coronavirus Job Retention Scheme (JRS) carries real risks of increased redundancies – particularly for those in the hardest-hit sectors – and so attention should also focus on the important question of just how many people are furloughed today.

Despite significant easing of the lockdown and attention rightly focused on the large number of redundancies announced of late, it’s still common to hear the claim that nine million employees are being paid right now through the scheme. However, this is simply not true. Although it is true to say that in total nine million people have been furloughed for at least one three-week period since March, this cumulative figure does not reflect what’s happening right now. Rather, all the evidence suggests that the number of people furloughed today – as employer contributions towards furlough pay kick in – is likely to be at most half, and maybe even as low as one-third, of this nine million total.

For the millions of workers who have returned to active employment over the past three months, the JRS has served its purpose well. But it may be the case that more than one million employees in the hardest-hit hospitality and leisure industries are still furloughed.

It’s in this context that the impact of the across-the-board increases to employer contributions in August, September and October are a concern. Delaying future increases in JRS contributions for the hardest-hit sectors would help reduce the rise in unemployment forecast in the autumn.

There are not nine million people on the Coronavirus Job Retention Scheme today

The Coronavirus Job Retention Scheme (JRS) has been a very successful and well-implemented policy intervention. It has supported household incomes in the face of an unprecedented shock, and maintained the crucial attachment between employees and their employer.

However, for many firms and employees it will have only ever been used on a temporary basis at the height of the economic shutdown. Many furloughed employees have since returned to work (some on ‘flexible furlough’ for part of their working hours), and a smaller group will have been made redundant already, even before today’s introduction of employer contributions.

But you wouldn’t know this from listening to our politicians and broadcasters. The Prime Minister, claimed on 24 July 2020 that his Government was “supporting the livelihoods of 9 million people now through furlough”. Similarly, the BBC reported on 28 July 2020 that “9.5 million people are using the scheme, the same as a week ago”.

This is wrong. Although the cumulative take-up of the scheme since its launch is in excess of nine million, the actual number of people using the scheme right now – on the day that employers are now required to start contributing to the payroll costs of furloughed employees – is undoubtedly much lower.

Figure 1 shows the increase in cumulative JRS take-up over time, as published by HM Revenue and Customs. These cumulative figures are now entirely meaningless when it comes to understanding the path of the economic recovery or the numbers of people who have been furloughed for a prolonged period of time.

Figure 1: Nine million people have been on the JRS at some point since its launch

All the evidence suggests that the number of people currently furloughed is at most half the nine million total, and could even be one-third of this level

In the absence of official statistics on furlough numbers over time, we can turn to other estimates of furloughing and coronavirus labour market effects from various Office for National Statistics (ONS) surveys, in order to get a sense of when take-up peaked and just how fast it has fallen.

Across the three available data sets stretching back to the announcement of lockdown on 23 March 2020, the consistent finding is that the number of people furloughed or away from work is likely to have peaked in late April at somewhere between seven and eight million employees (Figure 2). The upper end of this range is based on the ONS’s Business Impacts of Coronavirus Survey (BICS), which reported that 31 per cent of the private-sector workforce was furloughed in late April.

Figure 2: The number of people now furloughed is much lower than in late April

Since late April, the number of people furloughed or away from work looks to have fallen considerably. This is unsurprising given restrictions on non-essential retail were lifted on 15 June, and on many parts of hospitality and leisure on 4 July (in England).

The opening up of these parts of the economy, and the general increase in economic activity since the depths of lockdown, will have led to millions of employees returning to work.

For example, the number of people temporarily away from work above and beyond the usual level of temporary work absences (the red line in Figure 2)  fell by 40 per cent between late April and late May. This will have been driven primarily by people coming off furlough, but also by reductions in the number of people away from work for other reasons such as shielding, self-isolating or for childcare.

Some of this decline will also be driven by moves off the JRS and into unemployment, although this is likely to be a relatively small part of the story to date as in May, June and July employers had not yet been asked to contribute anything towards the costs of furloughing their employees.

More up-to-date estimates come from the BICS for early July, which suggests that 16 per cent of the private-sector workforce was furloughed at this time. We estimate this equates to around five million people still on furlough at the start of the month.

At the other end of the range, the Opinions and Lifestyle Survey (OLS) shows that the proportion of those who report that they are employed but furloughed fell from 13 per cent of all workers in the period 18-21 June, to 8 per cent of all workers in the period 8-12 July.

This figure, which equates to three million employees, is at the lower end of the range we’d expect, and will have been affected by the introduction of flexible furloughing from 1 July. Many employees who returned to work part-time in July will not have been counted as furloughed in these OLS estimates, but may well have still have the majority of their pay provided through the JRS (and will appear in some of the other series shown in Figure 2).

It would be unwise to lean too heavily on this or any other estimate from one particular survey in drawing conclusions as to the number of people furloughed today. The use of flexible furlough in July could mean that the pace of decline in take-up slowed last month as employees moved from full to flexible furlough, rather than off the scheme altogether. To date there is little evidence on the impact of flexible furlough on business behaviour, but it’s likely that usage of this component of the scheme will be high.

Overall, it is reasonable to draw the conclusion that the number of people furloughed right now, as employers begin making contributions to furloughed employees’ wage costs, is certainly below 4.5 million (half of the commonly cited nine million total) – and may be as low as one-third of this level.

Employer contributions will disproportionately affect workers in hospitality and leisure, so a sectorally differentiated wind-down of the scheme is desirable

Although the number of people furloughed right now is lower than many claim, it is still a large proportion of the workforce – particularly in some sectors. For this reason, the impact of the introduction of employer contributions towards furloughed employees’ wage costs from 1 August should not be taken lightly.

This big change to the scheme will mean that employers will now start paying employer National Insurance contributions and minimum auto-enrolment pension costs for furloughed employees, at an average of £70 a month (equivalent to 5 per cent of the average employee’s wages pre-coronavirus).

This shift will be followed by increases in contributions in September and October and then the ending of the scheme in November, changes which will have large effects on employer costs in sectors where furloughing rates are higher, such as hospitality and retail. We estimate that in these two sectors as many as one million employees (38 per cent) may still have been furloughed in late July (Figure 3).

Figure 3: Four-in-ten hospitality and leisure workers could still be furloughed

The fact that furloughing rates, and therefore the cost of employer contributions, are concentrated in particularly hard-hit sectors strengthens the case for treating these parts of the economy differently from the rest in the months ahead. Employees in these sectors are now at heightened risk of entering unemployment this autumn as employer contributions are introduced today and then increased throughout September and October.

We have previously called for the phasing in of employer contributions to take place on a slower timetable in the hardest-hit sectors for just this reason. The Government could still take this approach with the planned September and October employer contribution increases (to an estimated 15 and 25 per cent of pre-coronavirus wage costs), in order to limit redundancies in sectors like hospitality and leisure.

Further, the imposition of local lockdowns and the very real risk of a broader second wave means that Government must also be clear about what policy will do in these circumstances. In time, flipping the JRS so it subsidises work being done in these hardest-hit sectors, rather than provides payments when work isn’t done, would be more effective way of maximising the amount of work carried out and would be a more sustainable way of providing support to parts of the economy heavily affected by ongoing social distancing.

To date, the JRS has been a clear policy success. However, the challenges of phasing it out, calibrating it to the path of the virus and the return of economic activity mean that the hard work of designing and implementing policy that protects jobs and incomes in this crisis is far from over.