Tory chancellor Rishi Sunak has announced that the furlough scheme will be extended across Britain until the end of March.
It is the third major policy change related to furlough since the Winter Economy Plan was unveiled six weeks ago. It reflects the chaos over coronavirus and protecting workers’ jobs and incomes.
The scheme hands bosses 80 percent of workers’ wages.
That means workers who are laid off and qualify for the scheme still face a 20 percent pay cut.
And if you are on the minimum wage you still lose a fifth of your pay. The scheme ought to pay 100 percent of wages.
The extension of the furlough until the spring shows that the Tories have absolutely no confidence that their lockdown measures will bring down the virus.
Just as Boris Johnson was forced into a lockdown that was too little and too late, Sunak has gone through his own U-turn. In September he said extending the furlough was “not the kind of certainty that British businesses or British workers need”.
The winter could see a combination of deaths from the virus, a string of bankruptcies and mass unemployment.
This is still highly likely despite the scheme’s extension—which comes too late for many who have already lost their jobs.
And some bosses won’t use the scheme. This week Heathrow airport caterer Do & Co said it was making 1,068 staff redundant.It has refused to put them on furlough.
Sunak’s announcement came soon after the Bank of England announced a fresh £150 billion package of aid to business.
It will see another round of “quantitative easing”. This means the Bank of England buys up government bonds from banks, pension funds and other big financial companies.
This floods the system with electronic money and intends to lower borrowing costs for companies to help keep them afloat.
The hope is that the financial institutions, awash with cash, invest elsewhere in the economy, generating jobs and growth. But the record so far shows they mainly engage in various forms of financial speculation and share purchases.
More than 6,000 workers are set to lose their jobs at retailers Sainsbury’s, John Lewis and Clarks, plus Lloyds Banking Group.
Around 3,500 jobs are under threat after Sainsbury’s decided to close nearly all of its standalone Argos stores by 2024.
On the same day as the jobs cull was announced, Sainsbury’s unveiled underlying profits of £301 million for the first half of 2020. This was up from £238 million last year as supermarket sales rose during the lockdown.
The company also declared a special dividend payment for shareholders.
And there is more grim news in an Office for National Statistics survey released on Thursday.
It says a third of firms in the hotel or food sector have little or no confidence that they will survive for the next three months.
Overall, amongst all sectors, only 44 percent of firms have high confidence they will survive until February and 38 percent have moderate confidence.
But almost one in five are not confident.
Sunak has also given a glimpse of his longer term plans.
He was questioned by a Tory MP who asked where all the money for his schemes was coming from. Sunak said that in the first instance there would be a lot of borrowing.
But he added that this was not sustainable. He said the government will have to “reduce our structural deficit over time” and public finances will also have to be “balanced appropriately”.
That’s code for public spending cuts and tax rises. You can be sure he will want workers to pay.
It’s urgent that there is more resistance to the Tories.
Anger is growing at their class-based policies that favour big business, cut jobs and wages, and kill thousands of ordinary people.
But there is hardly a squeak from the official trade union and Labour leaders.
Frances O’Grady, general secretary of the TUC union federation said the furlough extension was “a positive step”.
We don’t need carefully-phrased statements of praise. We need a fightback.