Sectors like hospitality could benefit if the government adapts its furlough scheme to meet skills shortages, says the trade union Unite.
The government’s Coronavirus Jobs Retention Scheme is due to end on 30 September. At its peak, it provided wage support for more than 11 million UK workers. Trade union Unite, which played a central role in negotiating the scheme, says that in July around two million workers were still on the scheme, more than had been anticipated, reflecting the “continuing troubles for parts of the workforce and underlines that the economy is yet to recover from the crisis”.
Furloughed workers are currently receiving 80 per cent of their wages, with 60 per cent paid by the government and 20 per cent from their employer. When this support ends in September, those still unable to return to work will be forced onto Universal Credit, a system that takes five weeks to provide any sort of income beyond a loan, and where the financial support is among the worst in the developed world.
Unite argues that the government also plans to cut Universal Credit by £20 per week – £1,040 per year – on 30 September, despite warnings from the trade union, charities and Conservative MPs that this will deepen child and family poverty.
As a result, Unite is calling upon the government to “think again, not to dump furlough, but to adapt it to protect jobs and to retrain workers, including using it to build the skills urgently needed to address the climate crisis and the skills shortage”.
Steve Turner, assistant general secretary of Unite, said: “The end of furlough in six weeks’ time will see an overnight jobs crisis and a crash in incomes for hundreds of thousands of workers who are on the scheme through no fault of their own.
“These workers are in the very sectors that have been hardest hit by the government’s approach to managing the reopening of the economy.
"The travel, hospitality and aviation sectors which depend on tourism and travel to thrive, alongside many in manufacturing dependent on consumer confidence and global supply chains are still in a state of Covid disarray. This summer’s reopening chaos has only brought more troubles to these industries and their workforces.
“Ending the furlough scheme on the day that Universal Credit is cut by £20 a week is heartless, but it is also economically damaging, given that this money is spent in our communities on our high streets protecting further jobs and livelihoods.
“It’s a senseless, unjust move by the government to plunge these workers and their households into an immediate and chronic income crisis, so the government must think again.
“The taxpayers of this country made a massive investment in keeping working people off the dole and out of poverty. But by pressing on with its plans to pull the rug out from under working people at the end of September, the government is pouring this investment down the drain.
“Far greater thought must be given to adapting the scheme to ensure that we use it to upskill and retrain workers as we adapt and transition our industries to meet the climate crisis. It should also be used to support short-time working arrangements until demand returns and assists workers to move into sectors where there are vacancies.
"Furlough could also be used to help address the skills crisis we face across the economy – from engineers and plumbers to lorry drivers and digital workers.
“This scheme was a huge step forward for this country and put us on a par with other advanced economies. For the government to dismantle it is a purely ideological move that will bring further damage to our economy and working people.
“Ministers must put the country first – don’t dump furlough, adapt it – avoid an incomes crisis and work in the national interest as we repair from Covid."
A HM Treasury spokesperson said: “As a key part of our Plan for Jobs, the furlough scheme has been vital in supporting livelihoods in unprecedented circumstances over the pandemic – already protecting 11.6 million jobs at a cost of £67 billion – with this support in place until September.
“Our plan is working – there are now fewer than two million people on furlough – as the economy reopens and people get back to work, the numbers continue to fall.
“As the labour market adapts we will continue to take the necessary steps to support people find and maintain work through other schemes that form our £352 billion package – including through generous apprenticeships incentives, tripling the scale of traineeships, doubling the number of work coaches and the Kickstart scheme.”