By Adam Peggs
Two weeks ago, the Trades Union Congress’ unveiled plans for a new scheme to replace the government’s furlough scheme. As a post-pandemic legacy, the TUC are calling on the UK government to create a “permanent short-time working scheme… to help protect working people through periods of future economic change”.
Arguing that the existing furlough scheme, while flawed, is one of the major successes of the last 18 months, the TUC are arguing that the establishment of such a scheme would offer considerable benefits for workers. They argue the scheme would protect workers’ income, reduce the risk of workers losing jobs in crises, increase economic resilience and encourage a faster recovery. The latter argument draws on the insight that protecting workers’ incomes during a recession acts as an “automatic stabiliser”, by limiting the hit to demand when an economy goes into recession.
With the pressing need for a just transition to a green economy, and the country entering what ought to be the decisive decade for decarbonisation, the need to support workers in periods of transition is particularly strong.
Dubbed the ‘daughter of furlough’, there is a lot to be said for the scheme. It resembles the German Kuzarbeit – a social insurance programme in which workers are furloughed and encouraged to work part-time rather than laid off – and as the TUC point out draws on precedents from a number of other countries. In total, 23 OECD countries have similar schemes which resemble permanent versions of furlough.
Last year, Labour’s then Shadow Chancellor Anneliese Dodds presented similar proposals – calling for a part-time work scheme as an alternative to the government’s existing job retention scheme. When the government U-turned shortly after, Labour again found themselves being outflanked by the Conservative government. That the Labour Party’s announcement was also couched in arguments about government profligacy, accusing the Conservatives (correctly) of being “cavalier with public money”, also had the added side effect of reinforcing the longstanding narrative that public spending tends toward wastefulness.
The TUC scheme is couched in far more social democratic language. Both the announcement and the report focus on the need to support workers facing disruption to their lives, protect wages and against long-term structural unemployment and address insecurity and inequalities.
Welcome too, is the report’s call for conditions to be placed on firms to access the scheme. Here, the TUC argue in order to use the scheme firms should pay a living wage, eliminate precarious contracts, allow unions access to the workplace and reduce pay ratios to up to 20:1. At present, these conditions would rule out many companies. But here there is still room for greater boldness. Unions like United Voices of the World are demanding £12 per hour for staff in London, where the BFAWU have embraced a US-inspired ‘fight for £15’. In Spain, the renowned co-operative enterprise Mondragon has a longstanding pay ratio of 9:1.
Yet despite putting forward some important arguments, the report places little emphasis on working time reduction despite the TUC’s nominal commitment to a four-day week. A short-time working scheme is, almost self-evidently, an excellent tool for promoting reductions in the working week. Conditions on work-life balance and tackling overwork could easily be incorporated into such a scheme, including stipulations that companies adopt and implement plans to lower their normal weekly work hours.
Much as how the job creation necessary for the green transition offers opportunities to redesign working conditions, a successor to the furlough scheme can offer opportunities to do the same.
Using a short-time working scheme to promote long-term changes in working hours would also mitigate against the chances of workers being left behind. Since the pandemic, there has been a surge in interest in 4-day weeks, unlimited leave policies and other changes to work-life balance. While this interest is welcome, there are risks of uneven change – with the possibility that many workers end up left out of any progress.
Repurposing the UK’s furlough scheme could offer a chance for prioritising those industries currently more likely to be left behind when it comes to working time reduction. As a report from the think tank Autonomy has highlighted, those industries that were hardest hit by the pandemic could be targeted for support. In much the same way, industries where burnout and long hours culture are more commonplace could be singled out as priorities for change.
The furlough scheme has supported 11 million jobs in the UK, preventing many people from losing their livelihoods. With the scheme expected to be wound down, the TUC’s proposals offer a chance to learn from furlough’s successes and failures. Despite being once attacked as outlandish and unfeasible, support for a 4-day week is only rising, with some two-thirds of the public wanting the government to explore the idea. Further movement could see the concept becoming overwhelmingly popular and see raised expectations for change.
Governments around the world are already dipping their toes into this area, with policy initiatives around the idea in Scotland, Iceland and from a US Congressman and encouraging rhetoric in Finland and New Zealand. While repurposing furlough is no silver bullet for pursuing a shorter working week, schemes like the TUC’s could serve as a powerful complement to other long overdue workplace reforms.
Adam Peggs is a writer and activist based in Deptford, London.
Image: Trade Union Congress. Source: London April 13 2015 022 Trade Union Congress. Author: DAVID HOLT from London, England, licensed under the Creative Commons Attribution-Share Alike 2.0 Generic license.
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