In the last few weeks, with the press and public furore over MPs’ expenses dominating the headlines, you could be forgiven for forgetting that the UK is in the midst of a major global recession.
Whilst rank and file union members, like most members of the public, will be appalled by excessive claims out of the public purse, they may have more pressing, worrying issues on their mind – the threat of redundancy, seeking new employment and all the related insecurities that this brings. Clearly, action is needed to – literally – ‘bring the House into order’ and change politics for the better but this must not detract activists and government alike from taking action on the right policies to protect and assist jobs and skills in the current economic difficulties.
Many of my colleagues in the trade union movement welcome the leadership this Labour government has shown in taking action to tackle the recession by fixing the broken financial system. We know too that the Tories offer nothing more than cuts and complaints. But what we need now is more action from government to ensure there is a clear roadmap out of recession for jobs and skills.
So what action is needed? Amongst other things, what is key is the need to improve statutory redundancy pay and the implementation of wage subsidy and training to support jobs and skills retention. The latter not only makes sense because it reduces the flow of taxpayers’ money being paid out in benefits but it also keeps tax revenues flowing in and safeguards and invests in the skills backbone of our economy, both during and post-recession.
It is plain wrong that, in this day and age, statutory redundancy pay wallows pitifully at just 56% of the average 2008 weekly wage. The recent budget announcement to raise statutory redundancy pay from £350 per week to £380 per week was a step in the right direction but not nearly far enough. Bringing in proposals to raise the limit was a Warwick One commitment and Lindsay Hoyle’s Private Member’s Bill currently going through parliament seeks to change the outdated mechanism by which payment is calculated, taking into account factors such as average weekly wages and cost of living, as well as making it subject to annual review.
In order to stave off redundancies and the consequent loss of skills, a growing number of employers, notably but not exclusively in the automotive industry, are proposing short time working. For unions, central to such a proposal is the ability of workers to retain a level of earnings which enables them to meet their financial commitments and maintain a reasonable standard of living. A joint proposal from the TUC and the Federation of Small Businesses (FSB) has provided costed proposals for a £1.2bn package of short time working wage subsidies, which is estimated would save some 600,000 jobs. This package involves changes to benefits, government subsidies and much wider access to Train to Gain. Further studies are now looking into how such working subsidies could be funded by using some of the tax-payers money that has already been invested in the banking sector.
Short time working subsidies are not a new phenomena. In the late 1970s, a national temporary employment subsidy (TES) was made available to support employers. Where at least ten redundancies were threatened, the TES programme offered a subsidy of £20 a week for up to 12 months for each job saved.
Back in the twenty first century and over the border, Wales is one step ahead as the Labour led Assembly has brought in the ProAct a financial support package designed to help viable businesses cope with the downturn. It helps fund training during what are difficult times in order to up-skill staff in readiness for the upturn. The scheme works two-fold in providing training for employees who are on short time working, and helping companies retain skilled staff who may otherwise be made redundant.
ProAct is only available to businesses which have introduced short time working and face the threat of redundancies and broadly offers: up to £2,000 per individual towards training cost and a wage subsidy of up to £2,000 (at a rate of £50 a day) per individual whilst this training is being undertaken. The scheme was introduced in January this year and it is proposed to extend the pilot up until the end of the 2009-2010 financial year.
In addition to ProAct, there is also the ReAct scheme which offers employers a choice of three packages for taking someone on who has been made redundant. ‘Employer Recruitment Support’ funds employers who recruit individuals made redundant in the past six months and offers up to £2,080 paid in four installments as a contribution towards wage costs. ‘Employer Training Support’ is a separate discretionary fund of up to £1,000 that an employer can put towards the cost of the new recruit’s job-related training and the packages are available to employers if the individual they wish to recruit is either under formal notice of redundancy or has become unemployed in the last six months as a result of redundancy.
Times are challenging – both politically and economically – but we must not shy away from the bold decisions needed to effect change for the better. Now is the time for action on jobs and skills to ensure there is a clear UK wide programme to protect and develop jobs, skills and the economy for both today and tomorrow.