The government’s meal deal risks becoming a raw deal
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The chancellor's plan for jobs will fail without greater collaboration with trade unions and businesses, says Josh Abey
The chancellor's so-called 'plan for jobs' this month involved a job retention bonus for employers bringing back furloughed staff, the 'kickstart' scheme to provide work placements for young people facing long-term unemployment and demand-boosting policies to protect jobs in vulnerable sectors. But it was missing one crucial component, which led it to fall short.
Back in March, when the furlough scheme and the self-employed income support scheme were unveiled, Rishi Sunak stressed that in formulating the measures, he worked closely with those trade unions and employers. The chancellor went out of his way to reference the involvement of the Trades Union Congress, the Confederation of British Industry and the Federation of Small Businesses in his statements unveiling the original schemes.
Those on the frontline of the world of work had a seat at the table. This first package was relatively strong, and the benefit of workers' involvement was clear – not only to workers, but to their employers and to us all.
No such reference was made in the chancellor's summer statement this month. It is clear from the meagre content of the package and the TUC's response that there was a departure from any effort to devise policy in meaningful partnership, beyond just consultation.
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Two weeks on, opinions on the new package range from 'respectable but flawed' to 'disastrously inadequate'. The £1,000 job retention bonus is unlikely to persuade businesses to bring back employees they weren't going to bring back anyway, and the targeted, sector-specific extension of the furlough scheme many called for was nowhere to be seen.
The mixed reaction is in stark contrast to the near-universal praise for Sunak's initial response. The difference? Collaboration with trade unions and employers when the policies were being crafted, meaning workers' voices being represented and the realities of the world of work laid bare so the right challenges are being tackled. We are facing economic turbulence unprecedented in living memory. The economy shrunk by a fifth in the three months up to May this year. And the OBR's central forecast for the coming months and years makes for grim reading – with the unemployment rate predicted to reach 12% by the end of 2020 and remain well above the current rate even by the middle of the decade.
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If the government is to stand a chance in the fight against looming mass unemployment, it must look to replicate the scale and creativity of the initial response, which can only be achieved by working in 'social partnership' with trade unions and businesses.
Such an approach is prevalent across countries in Europe and beyond. Tripartite agreements – between business, unions, and government – underpinned Covid-19 labour market measures in Belgium, Denmark, Estonia, Finland, Iceland, South Korea and Spain. In many of these countries and others, the practice of including trade unions and businesses as social partners in policy-making is embedded and systematic – for example, in Germany, South Korea and Brazil, unions and employers are formally part of the agencies designing and implementing employment policy.
In preparation for the autumn budget and spending review, the government must bring workers and businesses back into the process.
But bringing workers and employers together in this way has value beyond enabling the government to ride out this political and economic storm. Technological change is continually disrupting economies, and social distancing could have a profound effect on how we work in the longer term as well. That's why social partnership should become a permanent feature of economic policy in this country, into the 2020s and beyond.
Josh Abey is a researcher for the Fabian Society