Furlough replacement measures announced won’t prevent mass job losses

The measures brought in by the government to replace the furlough scheme were unveiled this week. Under the new setup the most vulnerable workers in the economy will have the least support and no attempt has been made to prevent the potential for millions of redundancies when furlough is withdrawn at the end of this month.

The government claims the Job Support Scheme (JSS) is aimed at both encouraging a return to work, and helping businesses keep themselves afloat. This is done in two parts; firstly, a system of subsidies should workers return to work for at least 1/3rd of their hours, seeing workers paid more for less work, but still less than their previous 100% pay.[1] The second part is the extension of business loans, reducing the monthly cost of repayment. The Chancellor himself said this scheme was aimed not at protecting all jobs, but the most ‘viable’ instead.[2] The shifting of the majority of costs to businesses is supposedly to encourage them to keep jobs with the most potential for economic growth.

Unfortunately for the Chancellor these are not the types of jobs a decade of Tory rule in Britain has created over the past 10 years.[3] The scheme does not cover zero hours contracts. Those on the minimum wage already cannot afford to live and a further reduction to the money they will be taking home will not help. Meanwhile, so far no announcements have been made about the self-employed, a type of employment that has risen substantially across many sectors. These workers are cheaper to employ for exploitative employers, due to the lack of overheads such as workers’ rights.

Britain’s economic slump has been the worst in Europe due to its over reliance on the Services Sector.[4] The Services Sector accounts for 79% of all GDP in Britain, the highest in the G7 group of countries[5], and mainly comprises food annd entertainment, arts, hospitality and accommodation. These are the sectors with the most workers still on furlough[6], and many within them have already expressed the view that these measures will do little to support their sectors. This has already been most evident in London[7] due to the capital’s two-tiered workforce of wealthy professionals and financiers, and low-paid, economically insecure service workers.

It will come as little surprise then that estimates are already saying 25% of the 100,000 bars, restaurants and pubs will close and nearly 700,000 jobs will be lost in just the Service Sector alone.[8] The creative industries, often used to evidence Britain’s continued innovation and prosperity despite industrial decline, will suffer particularly due to the overwhelming reliance on self-employment in the sector.

Repeated criticisms have been made about the lack of training and investment in skills. [9]Otherwise it seems likely that the new jobs created after this recession will be a repeat of precarious, low paid and unskilled work that has become the new normal for many younger workers under the Tories.

Of the jobs going to be lost, many will be in those sectors with higher youth employment, but lower wages, precarious hours and often suffering from bullying management techniques and a poor enforcement of workers’ rights. Young people will have lost much with their inability to save money from low-paid work, something these new measures will intensify.

For the foreseeable future mutual aid networks will continue to have their work cut out. Many young people who have been encouraged to head off to university this year will now find themselves fairly isolated from any support networks. Those of us in a position do to so should aim to help put them in contact with pre-existing support groups.

With Labour backsliding into accepting a neo-liberal framework with its emphasis on new leadership against the old, and supporting the actions and framing of the Tory government, there is no in-depth political debate happening about how and why the British economy is so deeply fragile.

With the exception of the Communist Party and some trade unions, we are hearing little or nothing about long-term plans to address these highly structural issues resulting from 40 years of unrestrained capitalism. Despite all the economic intervention the government is making, it continues to steer the ship of capitalism, if anything speeding up its neoliberal agenda under the cover of the pandemic crisis. It is a government intent on securing profits for its own class instead of protecting working people.

Daragh O’Neill

[1] https://www.bbc.co.uk/news/uk-wales-54279110#:~:text=A%20new%20support%20scheme%20to,pay%2055%25%20of%20the%20bill.

[2] https://www.standard.co.uk/news/uk/rishi-sunak-support-scheme-announcement-a4555226.html

[3] https://www.tuc.org.uk/research-analysis/reports/general-council-report-2020?page=0

[4] https://www.ft.com/content/c8b172e2-8f70-4118-9e81-423e9a4b6839


[6] https://www.theguardian.com/world/2020/sep/24/rishi-sunak-warns-jobs-plan-will-not-stem-uk-rising-unemployment

[7] https://www.theguardian.com/world/2020/sep/24/rishi-sunak-warns-jobs-plan-will-not-stem-uk-rising-unemployment

[8] https://www.theguardian.com/world/2020/sep/24/rishi-sunak-warns-jobs-plan-will-not-stem-uk-rising-unemployment

[9] The Morning Star 25/09/2020

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