Tory chancellor Rishi Sunak announced another bailout package for bosses on Thursday as the coronavirus crisis deepens.
His Winter Economic Plan provides “bounce back loans” and defers VAT taxes for some businesses. It still leaves millions of workers facing the prospect of mass unemployment as the furlough scheme stops at the end of October.
A “job support scheme” will replace the furlough on 1 November and run for six months. The Treasury claims it will see workers receive 77 percent of their usual pay.
But many workers will still face pay and job cuts.
Paul Johnson of the Institute for Fiscal Studies think tank said the new scheme is a “very big change from furlough” and “far less generous”. It is “only open to those who are working a third of normal hours” and “a lot on furlough are now likely to lose their job”.
Around 2.5 million people are still on furlough scheme, which sees the state subsidise bosses’ labour costs.
Under the new job support scheme, all small and medium size businesses will be able to apply for money. Larger firms will have to show that their turnover has fallen by a third.
Bosses will still want to lay off workers to protect their profits.
Some will be able to reduce workers’ hours, rather than making them redundant. For the time that workers aren’t in work, the state will pay a third of their wages and bosses will pay another third.
This is still a significant cut.
Under furlough, workers received up to 80 percent of their wages if they would have otherwise been laid off because of the lockdowns. Sunak then slashed furlough support to 70 percent in September.
The state will stump up a maximum of 22 percent of wages under the new job support scheme from November.
Ahead of his speech to parliament, Sunak stood for photographs outside Number 11 Downing Street. He was flanked by TUC union federation leader Frances O’Grady and Carolyn Fairbairn, head of the CBI bosses’ organisation.
Unions hope that “social partnership” with ministers and bosses will save jobs. In reality, only a fight will stop the Tories and bosses making working class people pay for the coronavirus crisis.
The People Before Profit group is launching an “emergency programme for jobs, services and safety” on Tuesday. Speakers are set to include left wing Labour MPs John McDonnell, Bell Ribeiro-Addy and Nadia Whittome, and PCS civil service workers’ union leader Mark Serwotka.
The emergency programme says the furlough scheme “must be kept in place for at least the next 12 months” to stop mass redundancies. And it calls for it to “be extended to cover all workers” who have not had support, such as those on zero hours contracts or in bogus self-employment.
Firms making profits “must be barred from making mass redundancies and shareholder dividend payments should be frozen”.
Other demands include “an immediate massive programme of green investment” to “end dependency on fossil fuels and to provide a million climate jobs”. And the group calls on the government to “re-purpose industries like aviation, car production, engineering to urgently address the climate crisis”.
It will take strikes, protests and occupations to win those demands.
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