NEW POLLING reveals the extent to which low-paid workers have borne the brunt of the pandemic
NEW POLLING reveals the extent to which low-paid workers have borne the brunt of the pandemic
TUC analysis shows three industries furthest away from recovery are all low-paid and have highest rates of furlough use
TUC warns the end of furlough and Universal Credit cut will be a hammer blow for low-paid workers
Union body says without an economic reset post-pandemic the government’s levelling up agenda will be “doomed to failure”
The coronavirus crisis has been “a tale of two pandemics”, the TUC said today as it calls for an urgent “economic reset” to tackle the huge class divide in Britain that has been exposed by the pandemic.
The call comes as the union body publishes new polling which shows how low-income workers have borne the brunt of the pandemic with little or no option to work from home, no or low sick pay and reduced living standards, while better-off workers have enjoyed greater flexibility with work, financial stability and increased spending power.
Pandemic class divide
New TUC polling, conducted by Britain Thinks, has revealed the extent of the pandemic class divide with the high-paid more financially comfortable than before, while the low-paid have been thrust into financial difficulty:
Low-paid workers (those earning less than £15,000) are almost twice as likely as high-paid workers (those earning more than £50,000) to say they have cut back on spending since the pandemic began (28 per cent compared to 16 per cent)
High earners are more than three times likely than low-paid workers to expect to receive a pay rise in the next 12 months (37 per cent compared to 12 per cent).
This Covid class divide isn’t just apparent on personal finances. The polling also shows how low-paid workers are markedly more likely to get low or no sick pay compared to higher earners:
Low-paid workers are four times more likely than high-paid workers to say they cannot afford to take time off work when sick (24 per cent compared to six per cent).
Only a third (35 per cent) of low-paid workers say they get full pay when off sick compared to an overwhelming majority of high-paid workers (80 per cent)
The TUC has long been calling for an increase to statutory sick pay, which stands at a derisory £96.35 a week, and from which more than two million low-paid workers – mostly women – are currently excluded because they do not earn enough to qualify.
The union body recently criticised the government decision to “abandon” these two million workers by failing to expand eligibility of sick pay, as they had previously promised.
This lack of decent sick pay is compounded by the fact that low-paid workers are more than three times more likely than high-paid workers to say they their job means they can only work outside the home (74 per cent compared to 20 per cent).
This means that low-paid workers face greater risk of contracting the virus at work, and when ill, often face the impossible choice of doing the right thing but losing income or keeping full pay but potentially spreading the virus.
Low-paid industries lag
New TUC analysis shows that the three industries furthest away from a jobs recovery – arts and entertainment, accommodation and food and ‘other services’ – are all ‘low paid’ industries.
These are also the three industries with the highest furlough rates according to HMRC stats, and three of the highest according to most recent ONS estimate.
The end of furlough poses a serious threat to low-paid jobs in these industries – and combined with the “senseless” Universal Credit cut – will be a hammer blow for low-paid workers and push many further into hardship, the union body says.
Time for an economic reset
The TUC says its analysis and poll findings paint a picture of stark inequality in the UK, which has been further entrenched through the coronavirus crisis, and show that the country needs an urgent “economic reset” post-pandemic.
The union body warns that without such a reset, the government’s levelling up agenda will be “doomed to failure” as ministers risk repeating the same mistakes which followed the financial crisis, allowing insecure work to spiral even further.
To prevent unnecessary hardship in the coming months, the TUC is calling on the government to:
Extend the furlough scheme for as long as is needed to protect jobs and livelihoods and put in place a permanent short-time working scheme to protect workers at times of economic change
Cancel the planned £20 cut to Universal Credit
And as part of a post-pandemic reset, the TUC says ministers must:
Ban zero hours contracts
Raise the minimum wage immediately to at least £10
Increase statutory sick pay to a real Living Wage and make it available to all
Introduce new rights for workers to bargain for better pay and conditions through their unions
TUC General Secretary Frances O’Grady said: “Everyone deserves dignity at work and a job they can build a life on. But too many working people – often key workers – are struggling to pay the bills and put food on the table.
“It has been a tale of two pandemics. This Covid class divide has seen low-paid workers bear the brunt of the pandemic, while the better off have enjoyed greater financial security, often getting richer.
“This should be a wake up call – we need an economic reset. It’s time for a new age of dignity and security at work.
“Without fundamental change, the government’s own levelling up agenda will be doomed to failure. And we risk repeating the same old mistakes of the past decade – allowing insecure work to spiral even further.
“Ministers must start by banning zero-hours contracts, raising the minimum wage with immediate effect and increasing statutory sick pay to a real Living Wage, making it available to all.
“And we know that the best way for workers to win better pay and conditions at work is through their union.”
On the risk to low-paid workers this autumn, Frances said: “The imminent end to the furlough scheme and cut to Universal Credit this autumn will be a hammer blow for low-paid workers and could plunge millions into hardship, many of whom are already teetering on the edge.
“The government must reverse its senseless decision to cut Universal Credit and extend the furlough scheme for as long as is needed to protect jobs and livelihoods.”
Prime Minister Boris Johnson’s statement at yesterday’s press conference on health and social care:
Good afternoon, I’m joined by the Chancellor of the Exchequer and the Secretary of State for Health and Social Care, because today we’re setting out our plan to help our NHS recover from the pandemic and build back better by fixing the problems in health and social care that governments have avoided for decades.
We all know someone whose test, scan or hip replacement was delayed or who helped to protect the NHS amid the immense pressures of Covid by putting off treatment for a new medical condition.
And now, as people come forward again, we need to pay for those missed operations and treatments; we need to pay good wages for the 50,000 extra nurses we are recruiting, we need to go beyond the record funding we’ve already provided to the NHS, and that means going further than the 48 hospitals and 50 million more GP appointments.
So today, following the most successful vaccine programme in the world, we’re beginning the biggest catch-up programme in the history of the NHS, increasing hospital capacity by 110 per cent, and enabling 9 million more appointments, scans and operations.
I have to level with people – waiting lists will get worse before they get better, but compared with before Covid, by 2024/25 our plan will allow the NHS to aim to treat 30 per cent more patients who need elective care – like knee replacements or cancer screening.
A recovery on this scale cannot be delivered by cheese-paring budgets elsewhere and it would be irresponsible to cover a permanent increase in health and social care spending with higher day to day borrowing.
For more than 70 years, we’ve lived by the principle that everyone pays for the NHS through our taxes, so it’s there for all of us when we need it.
In that spirit, from April we will have a new UK-wide 1.25 per cent Health and Social Care Levy on earned income, with the money required by law to go directly to health and social care across the whole of our United Kingdom, and with dividends rates increasing by the same amount.
This will raise almost £36 billion over the next three years, not just funding more care but better care, including better screening equipment to diagnose cancer earlier and digital technologies allowing doctors to monitor patients in their homes.
The levy will share the cost as fairly as possible between people and businesses: because we all benefit from a well-supported NHS and all businesses benefit from a healthy workforce.
And those who earn more will pay more, including those who continue to work over the State Pension Age.
The highest earning 14 per cent of the population will pay around half of the revenue raised; no-one earning less than £9,568 will pay a penny, and most small businesses will be protected, with 40 per cent paying nothing extra at all.
And this new investment will go alongside vital reform, because we learned from the pandemic that we can’t fix the NHS unless we also fix social care.
When Covid struck, there were 30,000 hospital beds in England occupied by people who would have been better cared for elsewhere, and the inevitable consequence was that patients could not get the hip operations or cancer treatment or whatever other help they needed.
And those people were often in hospital because they feared the costs of care in a residential home.
If you suffer from cancer or heart disease, the NHS will cover the costs of your treatment in full.
But if you develop Alzheimer’s or Parkinson’s, then you have to pay for everything above a very low threshold.
Today, 1 in 7 of us can expect to face care costs exceeding £100,000 in our later years, and millions more live in fear that they could be among that 1 in 7.
Suppose you have a house worth £250,000 and you’re in a care home for eight years, then once you’ve paid your bills, you could be left with just £14,000 after a lifetime of work, effort and saving – having sacrificed everything else – everything that you would otherwise have passed on to your children – simply to avoid the indignity of suffering.
So we are doing something that, frankly, should have been done a long time ago, and share the risk of these catastrophic care costs, so everyone is relieved of that fear of financial ruin.
We’re setting a limit to what people will ever have to pay, regardless of assets or income.
In England, from October 2023, no-one starting care will pay more than £86,000 over their lifetime.
Nobody with assets of less than £20,000 will have to pay anything at all, and anyone with assets between £20,000 and £100,000 will be eligible for means-tested support.
And we’ll also address the fear many have about how their parents or grandparents will be looked after.
We’ll invest in the quality of care, and in carers themselves, with £500 million going to hundreds of thousands of new training places, mental health support for carers and improved recruitment, making sure that caring is a properly respected profession in its own right.
And we’ll integrate health and social care in England so that all elderly and disabled people are looked after with the dignity they deserve.
No Conservative Government wants to raise taxes, but nor could we in good conscience meet the cost of this plan simply by borrowing the money and imposing the burden on future generations.
So I will be absolutely frank with you: this new levy will break our manifesto commitment, but a global pandemic wasn’t in our manifesto either, and everyone knows in their bones that after everything we’ve spent to protect people through that crisis, we cannot now shirk the challenge of putting the NHS back on its feet, which requires fixing the problem of social care, and investing the money needed.
So we will do what is right, reasonable and fair, we’ll make up the Covid backlogs, we’ll fund more nurses and, I hope, we will remove the anxiety of millions of families up and down the land by taking forward reforms that have been delayed for far too long.
Chancellor Rishi Sunak’s statement on health and social care, delivered on 7 September 2021
Good afternoon.
I want to address straight away the following question:
Why do we need to raise taxes?
Three reasons.
First, we need to properly fund the NHS as we recover from the pandemic.
Senior NHS leaders have made clear that without more funding we will not properly be able to address the significant backlog…
…in people’s cancelled operations, delayed treatments, or missed diagnoses.
To get everyone the care they need is going to take time – and it is going to take money.
The second reason is that social care plans announced today have created an expanded safety net.
Instead of individuals having to bear the financial risks of catastrophic care costs themselves, we as a country are deciding to share more of that risk collectively.
This is a permanent, new role for the Government.
And as such we need a permanent, new way to fund it.
The only alternative would be to borrow more indefinitely.
But that would be irresponsible at a time when our national debt is already the highest it has been in peacetime.
And it would be dishonest – borrowing more today just means higher taxes tomorrow.
The third reason we need to raise taxes is to fund the Government’s vision for the future of health and social care.
Properly funded, we can tackle not just the NHS backlog and expand the social care safety net, we can afford the nurses pay rise;
Invest in the newest, most modern equipment;
Prepare for the next pandemic;
And provide one of the largest investments ever to upskill social care workers.
In other words, we can build the modern, more efficient health and social care services the British public deserves.
To fund this vital spending, we will introduce a new UK-wide Health and Social Care Levy.
From next April, we will ask businesses, employees and the self-employed to pay an extra 1.25% on earnings.
All the money we raise will be legally ringfenced, which means every pound from the Levy will go directly to health and social care.
The Levy is the best way to raise the funds we need.
It is fair: the more you earn, the more you pay.
It is honest: it is not a stealth tax or borrowed – the Levy will be there in black and white on people’s payslips.
And it is UK-wide, so people in England, Scotland, Wales and Northern Ireland will all pay the same amount.
To make sure everyone pays their fair share, we will also increase dividend tax rates by the same amount.
And, from 2023, people over the age of 66 will be asked to pay the Levy on their earnings too.
No Government wants to have to raise taxes.
But these are extraordinary times and we face extraordinary circumstances.
For more than 70 years, it has been an article of faith in this country that our national health service should be free at the point of use, funded by general taxation.
If we are serious about defending this principle in a post-Covid world …
… we have to be honest with ourselves about the costs that brings …
… and be prepared to take the difficult and responsible decisions to meet them.
Thank you.
PM Boris Johnson’s letter to the First Ministers of Scotland, Wales and Northern Ireland and Deputy First Minister of Northern Ireland on the new health and social care reform:
National Insurance Contributions increase ‘adds insult to injury’ for families facing devastating cut to Universal Credit
New Joseph Rowntree Foundation analysis estimates that around 2 million families on low incomes who receive Universal Credit or Working Tax Credit will pay on average around an extra £100 per year in National Insurance contributions under the Government’s proposed changes.
Peter Matejic, Deputy Director of Evidence & Impact at JRF said:“We are concerned that around two million families on low incomes who receive Universal Credit or Working Tax Credit will pay on average around an extra £100 per year in national insurance contributions under the Government’s proposal.
“This extra cost adds insult to injury for these families who are facing a historic £1,040 cut to their annual incomes when Universal Credit and Working Tax Credit are reduced in less than a month on 6 October. If it presses ahead, this Government will be responsible for the single biggest overnight cut to social security ever.
“With inflation rising, the cost of living going up and an energy price rise coming in October, many struggling families are wondering how on earth they will be expected to make ends meet from next month.
“The Chancellor is in denial if he seriously believes this cut will not impose unnecessary hardship on millions of families – the majority of whom are in low-paid work.
“Any MP who is concerned about families on low incomes must urge the Prime Minister and Chancellor to reverse this damaging cut, which will have an immediate and devastating impact on their constituents’ living standards in just a few weeks’ time.”
RCEM welcomes Government funding, but warns it won’t be enough
Responding to the announcement of an extra £5.4 billion of funding for the NHS, Dr Katherine Henderson, President of the Royal College of Emergency Medicine, said: “The announcement of this additional funding for the NHS over the next six months is very welcome.
“It comes at a crucial time when the health service enters what will likely be its most challenging winter ever, as it exits the pandemic, seeks to recover the elective backlog and faces the worst ever levels of performance in the summer.
“It is particularly welcome to see the investment in improving infection prevention control measures in hospitals, as this will continue to be of the utmost importance in the coming months. It is also pleasing to see funding to continue to improve the timely discharge of hospital patients. It is vital for Emergency Care that there is good flow throughout the hospital, which includes making sure patients have a smooth discharge from the hospital.
“While this short-term funding is appreciated, there must also be an adequate response to the sharp increase in demand and equivalent deterioration in performance. It is unlikely that this funding will be enough to help enable longer term recovery.
“The challenges that our Emergency Departments face stem from workforce shortages and capacity issues. A shortage of beds can lead to crowding, corridor care and poor flow through the hospital. Workforce shortages spread existing staff thinly and put them under severe pressure.
“These are long term issues and the only way to tackle them will be via a long-term funding plan for the health service, including a workforce plan to recruit nurses and doctors by expanding student medical and nursing places and training places.”
Dr Katherine Henderson, commenting on the announcement of a three-year settlement for health and social care, continued: “The three-year funding settlement announced for health and social care is welcome.
“But the scale of the challenges faced across the health and social care service at a crucial time of recovery mean this will likely not be enough – and the government must be realistic in the colossal task ahead for the health and social care service. It is essential that a plan to address the workforce crisis is prioritised.
“It is also welcome to see the long overdue the first steps towards a plan for social care. There has been a crisis within social care for some time, so it will be good to see the government fulfil its pledge to reform and tackle the social care crisis.
“For that to happen, it is vital that an adequate proportion of the settlement is allocated to social care.”
Commenting on Tuesday’s social care announcement by the Prime Minister, TUC General Secretary Frances O’Grady said: “We need a social care system that delivers high-quality care and high-quality employment.
“New funding for social care is long overdue. But today’s announcement will have been deeply disappointing both to those who use care, and to those who provide it.
“The Prime Minister promised us a real plan for social care services, but what we got was vague promises of money tomorrow.
“Care workers need to see more pay in their pockets now. Nothing today delivered that. Instead, the only difference it will make to low-paid care staff is to push up their taxes.
“This is so disappointing after the dedication care workers have shown during this pandemic keeping services running and looking after our loved ones.
“Proposals to tax dividends should have been just once piece in a plan to tax wealth, not an afterthought to a plan to tax the low-paid workers who’ve got us through the pandemic.
“We know social care needs extra funding. But the prime minister is raiding the pockets of low-paid workers, while leaving the wealthy barely touched.
“We need a genuine plan that will urgently tackle the endemic low pay and job insecurity that blights the social care sector – and is causing huge staff shortages and undermining the quality of care people receive.”
The TUC published proposals on Sunday to fund social care and a pay rise for the workforce by increasing Capital Gains Tax.
The union body says increasing tax on dividends is a welcome first step to reforming the way we tax wealth, but that it won’t generate the revenue needed to deliver a social care system this country deserves.
Instead, by taxing wealth and assets at the same level as income tax, the government could raise up to £17bn a year to invest in services and give all care staff a minimum wage of £10 an hour.
TUC analysis shows that seven in 10 social care workers earn less than £10 an hour and one in four are on zero-hours contracts.
Polling published on Sunday by the TUC showed that eight in 10 working adults – including seven in 10 Conservative voters – support a £10 minimum wage for care workers.
As we recover from the pandemic, how do we build a world of work that gives everyone the dignity and fairness we deserve?
Every trade unionist is invited to join us online for three days of discovery and debate at Congress 2021.
What to expect
Between Sunday 12 September and Tuesday 14 September, union members across the UK are meeting online to discuss how we build stronger unions and mobilise for a new deal for workers.
We’ll have debates on investing in a green economy, with good unionised jobs. We’ll discuss tackling racism, highlighting the work of the TUC’s Anti-Racism Task Force. And we’ll campaign for an overdue pay rise for our key workers and an end to the scandal of fire and rehire.
We’ll hear from Keir Starmer, leader of the opposition, and TUC general secretary Frances O’Grady, as well as union leaders, activists and key workers. A full online fringe events programme offers everyone a deeper chance to engage on issues they care about.
Join us
Congress is open to everyone. We have a growing union movement, based on our work keeping members safe and protecting their rights and livelihoods throughout the crisis.
This is our moment to demand real change for working people.
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:
Union body warns use of umbrella companies could spiral post-pandemic
New TUC research estimates that half of agency workers work for umbrella companies
The TUC has called for umbrella companies to be banned, as it publishes a new report on their increasingly widespread use in the UK labour market. The union body says the scandalous workplace practices associated with umbrella companies have “no place in modern Britain”.
An umbrella company is essentially a payroll company, used by recruitment agencies to operate a PAYE (pay-as-you-earn) system for the agency workers that they find work for. In many cases, the umbrella company will also employ the agency worker, with the agency workers becoming “employees” of the umbrella company.
A fragmented employment relationship
The TUC says that umbrella companies create multiple issues which mean it is difficult for workers to exercise their basic rights.
The union body says in particular, workers face misleading and unfair deductions from pay, adding that breaches of holiday leave and pay entitlement are widespread – with umbrella companies preventing workers from taking their holiday entitlements.
To make matters worse, the TUC says “the use of umbrella companies fragments the employment relationship”, leaving workers unsure of who to speak to resolve problems and often “passed from pillar to post” when trying to sort out their issues.
It has been widely reported that some umbrella companies promote and coerce their employees to use tax evasion schemes, leaving workers potentially facing huge future tax bills.
Increased use of umbrella companies
The union body is warning that the use of umbrella companies could spiral post-pandemic because of a combination of changes to tax rules (IR35) which have come in this financial year and the increase in agency work.
The IR35 or “off-payroll working rules” will potentially make employers liable for the tax and national insurance contributions of the contractors that they engage with. Government guidance states that the off-payroll working rules are unlikely to apply if you are employed by an umbrella company.
The TUC predicts that transferring contractors to umbrella companies will be seen by some companies as a convenient way to continue to shirk their tax and employment rights obligation.
New TUC research estimates that half of agency workers work for umbrella companies. Recruitment agencies have been used through the pandemic for key worker roles that needed to be mobilised quickly, like vaccinators and testing staff.
The TUC is concerned that post-pandemic the number of agency workers will increase – and therefore umbrella workers too – as companies scramble for new staff amid reopening and labour shortages in some sectors.
The TUC warns that there is no proper regulation of the sector, because the government has failed to task any of the enforcement bodies with regulating the umbrella sector, despite a recommendation from the Taylor Review into Modern Working Practices, that enforcement of umbrella companies should be stepped up.
The union body says this is a “gaping hole in enforcement” and lets down some of the lowest paid and most insecure workers.
In order to clamp down on the umbrella companies, the TUC is calling for:
An outright ban on umbrella companies by requiring employment agencies to pay and employ the staff they place with clients
Joint liability laws in supply chains, that make the end client and any contractor in the supply chain responsible for upholding the legal rights of those working in the supply chain
Greater trade union access to workplaces and new trade union rights
TUC General Secretary Frances O’Grady said: “Everyone deserves decent work. But too many low-paid workers are denied the wages they were promised and basic legal rights like holiday pay because they work for umbrella companies.
“Lots of them are the key workers we all applauded – like social care workers, teachers and coronavirus testing staff.
“These scandalous workplace practices have no place in modern Britain. But our inadequate regulations let dodgy umbrella companies off the hook – allowing them to act with impunity.
“Employers shouldn’t be able to wash their hands of any responsibility by farming out their duties to a long line of intermediaries.
“Enough is enough. It’s time for ministers to ban umbrella companies, without delay.”
The UK Government has now confirmed that £20 a week will be cut from Universal Credit in October. By removing this lifeline, poverty will increase among the 6 million claimants of Universal Credit, says the TUC.
40 percent of these claimants – over two million people – are in work.
Number of people on Universal Credit 2020/21 (including in work and out of work breakdown):
Source – TUC analysis of stat explore data using May 2021 data
Our new analysis reveals the regional and local impact cutting Universal Credit will have on low-paid workers.
Numbers on Universal Credit in work by region/nation (May 2021):
Region/nation
Number in work receiving UC
Total number receiving UC
% Of UC recipients in work
North East
100,437
281,759
35.6%
North West
282,131
755,400
37.3%
Yorkshire & Humber
194,344
518,269
37.5%
East Midlands
166,265
403,272
41.2%
West Midlands
214,730
585,069
36.7%
East of England
199,459
494,271
40.4%
London
375,426
1,015,321
37.0%
South East
274,235
677,609
40.5%
South West
184,983
439,612
42.1%
Wales
103,609
279,068
37.1%
Scotland
176,935
481,263
36.8%
Total
2,274,976
5,938,914
38.3%
Source – TUC analysis of stat explore data using May 2021 data – for constituency level data see press release
The impact on poverty
The government justifies the £20 cut by saying its focus is to move people into jobs, but this misses the point. Many of those on Universal Credit (40 percent of claimants) are already in work.
2.3 million workers, many of which are key worker households, will be worse off as a result of the government’s plans to cut universal credit.
The working tax credit is also being cut, having also been raised by £20 per week in early 2020. This cut to crucial in-work support will push more families below the breadline.
Analysis by the Joseph Rowntree Foundation shows the majority of families that lose out will be working families.
These cuts are likely to worsen already record-high levels of poverty.
Just before the pandemic hit, poverty was at a record high, with 14.5 million people in poverty. The majority of these (57 per cent, or 8.3 million people) were in working households. The idea that work is a guaranteed route out of poverty is now simply not true.
Low standard rate
Even with the increase in the rate by £20 a week – the basic rate of universal credit is worth around a sixth of average weekly pay.
The UK system is strikingly less generous than in most other European countries, where unemployment benefits are related (at least in the initial period of unemployment) to previous wages to cushion income shocks, ranging from 60 per cent of previous wages in Germany to 90 per cent in Denmark.
The TUC believes that rather than being cut, Universal Credit should be increased to at least 80 per cent of the level of the living wage, around £260.
And the temporary £20 top-up excluded those on legacy benefits all together, many of whom are disabled or carers, and cannot work. This should be extended to these claimants too.
Change is needed
The UK safety net is failing as a result of years of deliberate attacks on the social security system, with around £34 billion of cuts made to social security since 2010.
The reason for increasing Universal Credit and Working tax credits was that previous rates were too low. Removing this increase makes no sense. The pandemic might – hopefully – be going away, but the need for social security isn’t.
The £20 increase in universal credit has been a “vital lifeline” for low-paid workers: having £20 a week less to spend will mean going without the essentials in life.
An ambitious agenda to tackle in-work poverty would include decent pay, secure work, progression opportunities for those on low incomes, and affordable childcare and housing costs.
It would not include a cut to the lifeline support that working families across the country are relying on.
TUC publishes first UK major report into sexual harassment of disabled women at work
Most disabled women surveyed told the TUC they have been sexually harassed at work – and 1 in 8 of those say they left their jobs because of this
TUC calls for a new duty on employers to protect all their staff from sexual harassment at work
Around 7 in 10 (68%) disabled women surveyed about sexual harassment say they have been sexually harassed at work, according to a new poll published by the TUC.
And younger disabled women aged 18 to 34 are even more likely to have experienced sexual harassment, with almost 8 out of 10 (78%) reporting being harassed at work.
Sexual harassment
A ground-breaking TUC study on sexual harassment published in 2016 found that more than half (52%) of women had experienced sexual harassment in the workplace. And in a further TUC survey in 2019, nearly 7 in 10 (68%) lesbian, gay, bisexual and trans people reported being sexually harassed at work
Sexual harassment at work can take many forms, from suggestive remarks, jokes about a colleague’s sex life, circulating pornography, to inappropriate touching, hugging or kissing, demands for sexual favours, and even assault and rape.
This new TUC survey – which is the first major study into the sexual harassment of disabled women at work in Great Britain, and was carried out by YouGov – found that of those surveyed:
Around 2 in 5 (38%) have experienced unwelcome sexual advances at work.
More than 1 in 3 (36%) say they have experienced unwanted touching.
Almost 1 in 5 (18%) experienced sexual assault, such as unwanted sexual touching.
And 1 in 25 (4%) have experienced a serious sexual assault or rape at work.
Reporting
Two-thirds (67%) of disabled women who experienced sexual harassment at work told the TUC that they did not report the harassment to their boss the most recent time it happened. Of these, the most common reason was that they did not believe they would be taken seriously (39%).
Some said they were worried it would have a negative impact on their career or work relationships (30%). Other reasons included not thinking they would be believed (13%) or thinking they would be blamed if they reported the incident (11%).
And unfortunately, of those who did report the most recent instance of sexual harassment, more than half (53%) said it was not dealt with satisfactorily.
Impact
Disabled women told the TUC that sexual harassment had a big effect on their lives.
Around 1 in 3 (34%) said their experiences had a negative impact on their mental health. More than 1 in 5 (21%) said it negatively affected their relationships with colleagues. And it caused 1 in 8 (12%) to leave their job or employer entirely.
Disabled women face significant barriers getting into work and to getting paid the same as non-disabled workers, says the TUC.
TUC research in October 2020 found that disabled women earned 36% less than non-disabled men. And the analysis found that the unemployment gap for disabled women, when compared to non-disabled men was 32.6 percentage points.
TUC General Secretary Frances O’Grady said: “No one should face sexual harassment at work. But seven in ten disabled women say they have been sexually harassed by a colleague or a customer while at work.
“Four years on from the explosion of #MeToo on a global scale, employers still aren’t doing enough to make sure women are safe at work. It’s time for every employer to take responsibility for protecting their staff from sexual harassment.
“Ministers must change the law to make employers protect workers from sexual harassment specifically, and from all forms of harassment by customers and clients.
“Anyone worried about sexual harassment at work should get in touch with their union.”
Ministers must act
The TUC is calling on the government to take a range of actions including:
Introduce a new duty to prevent sexual harassment, putting an enforceable legal requirement on all employers to protect their workers from harassment.
Strengthen legislation to tackle third-party harassment in the upcoming employment bill.
Increase funding for the Equality and Human Rights Commission so it can enforce the new duty to prevent sexual harassment.
Introduce a statutory code of practice on sexual harassment and harassment at work, setting out the steps that employers should take to prevent and respond to sexual harassment, and what can be considered in evidence when determining whether the duty has been breached.
Met Office issues extreme heat weather warning for the first time
Forecasters warn temperatures will continue to climb and could reach 33 degrees C (91.4F) in some parts of the country
TUC calls on employers to make sure staff are protected from the sun and heat
The TUC has urged employers to make sure their staff are protected from the sun and heat, as the Met Office issues one of its new-style extreme amber heat weather warnings for the first time.
The amber warning covers parts of Wales, all of south-west England and parts of southern and central England and will be in place until Thursday (22 July), when temperatures are expected to peak.
Health warning
Working in hot weather can lead to dehydration, tiredness, muscle cramps, rashes, fainting, and – in the most extreme cases – loss of consciousness.
The TUC says employers can help their workers by:
Allowing flexible working: Giving staff the chance to come in earlier or stay later will let them avoid the stifling and unpleasant conditions of the rush hour commute. Bosses should also consider enabling staff to work from home while it is hot.
Keeping workplace buildings cool: Workplaces can be kept cooler and more bearable by taking simple steps such as opening windows, using fans, moving staff away from windows or sources of heat, or installing ventilation or air-cooling.
Temporarily relaxing their workplace dress codes: Encouraging staff to work in more casual clothing than normal – leaving the jackets and ties at home – will help them keep cool.
Keeping staff comfortable: Allowing staff to take frequent breaks and providing a supply of cold drinks will all help keep workers cool.
Talking and listening to staff and their union: Staff will have their own ideas about how best to cope with the excessive heat.
Sensible hours and shaded areas for outdoor workers: Outside tasks should be scheduled for early morning and late afternoon, not between 11am-3pm when temperatures are highest. Bosses should provide canopies/shades where possible.
Sun protection: Prolonged sun exposure can be dangerous for outdoor workers, so employers should make sun protection available.
The law
There’s no law for minimum or maximum working temperatures. However, during working hours the temperature in all indoor workplaces must be ‘reasonable’.
Guidance suggests a minimum of 16degC, or 13degC if employees are doing physical work. And employers have a duty to keep the temperature at a comfortable level and provide clean and fresh air.
The TUC would like to see a change in the law so that employers must attempt to reduce temperatures if they get above 24degC and workers feel uncomfortable. And employers should also be obliged to provide sun protection and water for outdoor workers.
The TUC would also like ministers to introduce a new maximum indoor temperature, set at 30degC – or 27degC for those doing strenuous jobs.
TUC General Secretary Frances O’Grady said: “We all love the summer sun. But working in sweltering conditions in a baking shop or stifling office can be unbearable and dangerous.
“Indoor workplaces should be kept cool, with relaxed dress codes and flexible working to make use of the coolest hours of the day.
“And bosses must make sure outdoor workers are protected with regular breaks, lots of fluids, plenty of sunscreen and the right protective clothing.”
The TUC is also asking employers to consider additional needs that may arise in hot weather from coronavirus health and safety requirements. Frances O’Grady added:
“It’s even more important to use PPE safely in this hot weather. Staff will need extra breaks to cool down if their equipment reduces ventilation.
“And while many offices have air conditioning, few people have it in their homes. Lots of staff are still working from home, so they may struggle to work during the hottest parts of the day. Employers should allow flexible hours so people can work when it’s cooler.”
People across Scotland are being given the chance to become owners of at-risk local pubs, theatres, post offices, sports grounds and corner shops thanks to the UK Government’s new £150 million Community Ownership Fund.
The move is part of the UK Government’s strategy to build back better from the pandemic by giving communities the power to save the local institutions that bring us together and foster a sense of community.
Details were published yesterday of how voluntary and community organisations across Scotland and the rest of the UK will be able to bid for up to £250,000 matched funding to buy or take over local assets and run them.
Up to £1 million will be available to establish sports clubs or help to buy sports grounds at risk without intervention – meaning a group of loyal supporters could become the Chairman and board at their beloved local team.
A total of £12.3 million has been set aside for community projects in Scotland, whether they be sporting and leisure facilities, cinemas and theatres, music venues, museums, galleries, parks, pubs, post office buildings and shops.
The Prime Minister unveiled more detail as part of a major speech setting out how the UK Government will continue to ‘level up’ all regions of the country as we bounce back from the pandemic.
Scottish Secretary Alister Jack said: “Alongside the Levelling Up, Community Renewal and UK Shared Prosperity Funds, the Community Ownership Fund is part of a crucial package of UK Government investment to support communities.
“The funds will play an important role as we build back better from the pandemic. I encourage communities across Scotland to take advantage of the wonderful opportunities the Community Ownership Fund provides.”
The announcement follows major investment and action from the UK Government to level up opportunity and prosperity across all areas of the country, including through the £4.8 billion Levelling Up Fund and the £220 million Community Renewal Fund.
The UK Government will undertake a series of information events with communities, the Voluntary and Community Sector (VCS) and local authorities in all parts of the UK.
The first bidding round closes on 13th August with another seven bidding rounds expected to take place over the next four years.
TUC: We can’t level up the country without levelling up at work
Commenting on yesterday’s speech by the prime minister on levelling up, TUC General Secretary Frances O’Grady said: “We can’t level up the country without levelling up at work.
“This pandemic has brutally exposed the terrible working conditions, low pay and insecurity many of our key workers face.
“But so far, there has been precious little to show for the government’s vaunted levelling up agenda. And today’s announcements will do little to change that.
“With more than 1 million children of key worker households in poverty and 3.6 million workers stuck in insecure jobs, it’s time the government moved on from empty sound bites.
“Enough is enough. Ministers must invest in good green jobs in industries of the future, ban zero hours contracts and give all of our key workers a pay rise.
“And they must invest in warmer homes, faster broadband and better public transport links across the country. That’s how we level up the UK.”
New research published by the TUC (produced by Landman Economics) finds that over a million children of key workers are currently living in poverty.
The research, which used the government definition for key workers, found that in some regions more than a quarter of children in key worker households are living in poverty.
Key worker families in the North East have the highest rate of child poverty (29%), followed by London (27%), the West Midlands (25%) and Yorkshire and the Humber (25%).
Government policies could worsen key worker poverty
The TUC says the main reasons for key worker family poverty are low pay and insecure hours – factors that often coincide in occupations such as care workers, delivery drivers or supermarket staff.
High housing costs further reduce keyworker family budgets for essentials like groceries and utility bills. And support through Universal Credit is not enough to guarantee families avoid poverty.
Current government policies are likely to increase child poverty rates. Ministers have capped pay rises for key workers in the public sector, which in some cases will mean real wage losses. And the chancellor is planning to cut Universal Credit for low-income families by £20 per week in October.
The TUC warns that these policies will put the brakes on the nation’s economic recovery by curbing household spending. This will restrain business activity, and impact on wage growth for other workers across the economy.
TUC General Secretary Frances O’Grady said:“Every key worker deserves a decent standard of living for their family. But too often their hard work is not paying off like it should. And they struggle to keep up with the basic costs of family life.
“The prime minister has promised to ‘build back fairer’. He should start with our key workers. They put themselves in harm’s way to keep the country going through the pandemic. Now, we must be there for them too.
“This isn’t just about doing right thing by key workers. If we put more money in the pockets of working families, their spending will help our businesses and high streets recover. It’s the fuel in the tank that our economy needs.”
Support needed for key worker families
The TUC is calling on the government to guarantee decent living standards for key worker families by:
Raising the national minimum wage to £10 per hour immediately.
Ending the freeze on public service workers’ pay and give all public service workers a decent pay rise.
Funding the public sector so that all outsourced workers are paid at least the real Living Wage and get parity with directly employed staff.
Canceling the £20 cut to Universal Credit, which is set to hit low-income families in October, and set out plans to increase child benefit above inflation each year across the parliament.
– Children in poverty in key worker households by UK nation and region
Region
Children in poverty in key worker families
Proportion of children in poverty in key worker families
