Rishi Sunak recently announced that a new ‘Job Support Scheme’ will replace the current furlough scheme when it comes to an end on 31 October. The latest measures scale back the level of state support for workers and the self-employed.
The number of workers entitled to support is dramatically reduced. In the original furlough scheme, those who could not work due to the pandemic were paid 80% of their income by the state.
From 1 November, only those who continue to work one-third of their hours will be entitled to wage subsidies. These workers will see their income topped up to 77% of their usual pay.
Even for those who remain entitled to such support, then, this is a bleak picture.
Hire and fire
Businesses will be made to pay in as part of the subsidy, matching the 22% contribution from the state. But, in effect, they are being encouraged to hire and fire at will.
Under the new setup, the incentive for the bosses is to hire fewer people on more hours, and make the rest entirely redundant. So the government’s ‘job support’ scheme will actually lead to...a massive loss of jobs.
Furthermore, those working less than one-third of their usual hours will receive no further support at all (other than the notoriously insufficient Universal Credit).
This is only a reflection of the general chaos and anarchy seen under capitalism, where mass unemployment for millions exists alongside overwork, long hours, low pay, and intense stress for millions of others.
The Job Support Scheme was supposed to indicate the beginnings of a sea-change. Previously there was a clear message from the Treasury to the bosses: “Whatever you do, don’t make too many redundancies.”
Sudden mass unemployment would have meant the threat of civil unrest, on the one hand; and an even more catastrophic collapse in consumer spending, on the other. In short, the furlough scheme was a desperate attempt by the establishment to keep their system on life support.
The message now, however, seems to be: “Mass redundancies are inevitable – let’s get the ball rolling! Let the invisible hand of the market do its work!”
The Chancellor’s new proposals, however, have been widely condemned before they have even come into effect. With a second wave taking off and pressure mounting, the Tories have been forced to announce a ‘Local Furlough Scheme’.
Businesses that are forced to close due to COVID-related restrictions will be entitled to the local furlough scheme. As before, the state will subsidise wages on behalf of employers, but this time only up to 66% of workers’ incomes.
But also as before, these latest measures are not enough to leave anyone happy. On one side, low-paid workers in affected industries – such as hospitality – cannot afford to survive on two-thirds their usual pay.
On the other side, Rishi Sunak voiced the concerns of the ruling class when he stated in Parliament that he “cannot save every job”. Instead, the capitalists want the Tories to unleash a wave of ‘creative destruction’ – with the emphasis on the destruction – to lose some of the ‘dead weight’ in the economy.
The decimation of the arts and culture sector gives a glimpse of what is yet to come for millions of workers.
Rishi Sunak confirms the government's furlough scheme will come to an end as planned at the end of October.— LBC (@LBC) September 24, 2020
TheChancellor says people need to be in viable jobs. 'I cannot save every business. I cannot save every job. No Chancellor could.'https://t.co/dlOvgfjMP5 pic.twitter.com/vWKjcI4Z7L
The government’s recent promises, therefore, have done nothing to quell public anger. Many are shocked at Tory ministers’ apparent shoulder-shrugging towards the destruction of livelihoods. But we should expect nothing less from these political representatives of the callous capitalist system.
From the workers’ movement, however, what is needed is clear opposition and militant leadership.
Disgracefully, the leaders of the TUC have linked arms with the Tories and the CBI (the bosses union) to endorse Sunak’s proposal. Posing for the press outside of 11 Downing Street, TUC general secretary Frances O’Grady signed off on mass unemployment without so much as a whimper.
Sometimes a picture says a thousand words. TUC chief Frances O’Grady with CBI head and Rishi Sunak. Workers can’t look to the TUC hierarchy for leadership - and it was ever thus. pic.twitter.com/7JQ0Yv6ID0— Jonathon Shafi (@Jonathon_Shafi) September 24, 2020
To defend jobs, the trade union leaders should be organising and leading a united mass struggle against redundancies. This can only be done through a combination of strikes and occupations against cuts and closures, on one side; and by mobilising workers around a bold political programme, on the other.
Such a programme should include the demand for ‘work or full pay’; for the bosses to foot the entire bill for this crisis, by expropriating their accumulated profits; and for the nationalisation of the banks and major monopolies, under workers’ control, in order to plan the economy and provide decent jobs and a genuine living wage to all.
Workers must reject the class-collaborationist approach being pursued by the leaders of the labour movement. The interests of workers and the bosses are not aligned, but in mutual opposition.
The Labour and trade union leaders should therefore stop sowing illusions in the celebrated ‘German model’, which is only a case of ‘rewarding employers’ for reducing hours. Rather than settling for such crumbs, the working class must demand the whole bakery.
In any case, the depth of the capitalist crisis means that the bosses will not even be able to offer crumbs in the period ahead. The cupboard is bare.
Weakness on the part of the union leaders will only invite further aggression from the capitalists. In place of this feeble approach, the working class needs a fighting leadership. We have no time to waste. For a bold socialist opposition!