The TUC, the British Chambers of Commerce (BCC), EEF the manufacturers’ organisation, the Federation of Small Businesses (FSB) and The Work Foundation joined forces this week to call on the Government to introduce a temporary short-time working scheme across the UK in next week’s Budget.
The organisations have jointly written to the Chancellor of the Exchequer, Alistair Darling MP, outlining a plan in which Government would partially compensate workers for lost earnings where there was an agreed reduction in working hours and pay, and a commitment to training.
Such a scheme would be vital to keeping workers in employment and would help viable businesses survive during the global downturn, the organisations say.
Arrangements of this kind can be found across the EU. In Germany, state support for short-time working is available for 18 months from the date of application - and this may be extended to two years if unemployment continues to rise.
The organisations believe that such short-time working arrangements minimise the risks of unemployment while economies are shrinking. They are also an investment in the workforce, as staff use sacrificed working hours to take part in Government-backed training.
The organisations believe the benefits of short-time working schemes are evident: workers keep their jobs and build their employability; employers retain skilled employees; and the Government avoids the higher costs associated with benefit payments and the indirect costs of rising unemployment.
TUC General Secretary Brendan Barber said: “UK unemployment is already over two million and is spiralling fast. Introducing a temporary short-time working scheme would help businesses stem the flow of job losses.
“Such agreements provide a quick and effective way to cut costs for struggling businesses and give hard-pressed employees vital financial help.
“Short-time working schemes are working well across Europe and are preventing many thousands of unnecessary job losses. The Government must provide ensure that UK businesses and workers have access to such channels of support.”
Gilbert Toppin, CEO of the EEF said: “As part of the real economy, manufacturing will play an important role in dragging us out of our current predicament. However attracting and retaining skilled workers was one of the main problems for manufacturers when times were good. In the current economic climate, therefore, it is vital that we give temporary support to help companies hold on skilled workers who could otherwise be lost to the sector.”
Whilst BCC Director General David Frost said: “It is absolutely crucial that our economy’s skills base is protected during the downturn. The loss of skills, especially in manufacturing, will only act to stifle growth in the long-term. Successful initiatives from previous recessions should be revisited and applied to the present climate - a short-time working scheme is one of them.”