Job protection plans / Furlough scheme....

The Proper Chap

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It shouldn't be a free ride for anyone.

Just say an employer can offer someone 33% of their original work and the employer pays for this 33% what are you suggesting the options are ?

- government pays the rest ?

- employee gets 33% of their former salary ?

What do you want to happen ?
 

StroudGrecian

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The default option has always (to my knowledge) been, if you don’t work you go on the dole/JSA/UC. I don’t see how/why this has to change.
I totally understand businesses may need assistance, but for general employees I don’t see why it should be different.
Because the assistance that businesses need is in retaining skilled employees on the payroll, so when 'normality returns' they can ramp up production as painlessly as possible. Your assertion that those no longer needed during the height of a pandemic can just go on the dole until its all over doesn't take into account the huge cost and disruption that redundancy brings, to both employers (redundancy procedures & costs, subsequent recruitment uncertainties, costs and delays) and to (former) employees (loss of livelihood, financial hardship, potential loss of home) not to mention the impact on health and wellbeing - and that's assuming they don't catch Covid. Taking away livelihoods also means huge reduction in tax receipts as people earn less and spend less.

The issue with the UK Gov's furlough scheme is that it was really poorly planned and implemented - fuelled by their brexit-mindset inability to look across the channel and see how our Europeans neighbours were managing. Both France and Germany were able to extend existing schemes to help businesses in exceptional and time-limited difficulties - the key to which was encouraging part-time working as much as possible. The UK decision to ignore this and go it alone with a furlough scheme that actually banned part-time working for 4 months meant that our scheme has ended up being twice as costly as the French and Germans, who can now afford to continue supporting businesses through the winter while we're looking at some half-baked revised support scheme that no employer in their right mind is going to touch.
 

BigBanker

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It shouldn't be a free ride for anyone.

Just say an employer can offer someone 33% of their original work and the employer pays for this 33% what are you suggesting the options are ?

- government pays the rest ?

- employee gets 33% of their former salary ?

What do you want to happen ?
I want the Government to offer greater financial support, so that employers are not financially incentivised laying people off instead of retaining them. At the very least this should mean that employers get the equivalent part time hours from their employees to the part salary they can afford to pay.

If you're worried about wasting public money, the 22% being offered by the Government at the moment will, in the vast majority of cases, be paid to employers who were going to retain their staff anyway (without support). It's such a flawed package that I can only assume it's been done deliberately.
 
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BigBanker

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Because the assistance that businesses need is in retaining skilled employees on the payroll, so when 'normality returns' they can ramp up production as painlessly as possible. Your assertion that those no longer needed during the height of a pandemic can just go on the dole until its all over doesn't take into account the huge cost and disruption that redundancy brings, to both employers (redundancy procedures & costs, subsequent recruitment uncertainties, costs and delays) and to (former) employees (loss of livelihood, financial hardship, potential loss of home) not to mention the impact on health and wellbeing - and that's assuming they don't catch Covid. Taking away livelihoods also means huge reduction in tax receipts as people earn less and spend less.

The issue with the UK Gov's furlough scheme is that it was really poorly planned and implemented - fuelled by their brexit-mindset inability to look across the channel and see how our Europeans neighbours were managing. Both France and Germany were able to extend existing schemes to help businesses in exceptional and time-limited difficulties - the key to which was encouraging part-time working as much as possible. The UK decision to ignore this and go it alone with a furlough scheme that actually banned part-time working for 4 months meant that our scheme has ended up being twice as costly as the French and Germans, who can now afford to continue supporting businesses through the winter while we're looking at some half-baked revised support scheme that no employer in their right mind is going to touch.
Nail. On. Head.
 

The Proper Chap

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People talk about when normality returns, could be 8 months, could be 3 - 5 years, at what time do you stop saying when normality returns, it is highly likely we will never return to the normality of before.
 

StroudGrecian

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People talk about when normality returns, could be 8 months, could be 3 - 5 years, at what time do you stop saying when normality returns, it is highly likely we will never return to the normality of before.
You're right of course - 'normality' has never stood still and certainly won't look the same either side of a pandemic.

But remember, furlough isn't cost neutral to employers, they currently have to pay staff NI & pension contributions, 10% of wages (rising to 20% next week) plus anything over the 80% & £2500 per month limit imposed by government if they choose to top-up staff wages, as well as overheads on business premises and infrastructure designed for a bigger workforce. No business would retain staff on furlough under these circumstances unless they genuinely believe that it is in the long-term interest of the business and that there are going to be jobs to return to - when that may happen will depend very much on the type of business, type of job, and the ups and downs and vagaries of local lockdowns over the coming months, but who better to decide whether furloughed employees still have a future, and remain affordable, than the businesses themselves?

IMHO the furlough scheme needs to be retained throughout the winter, as other countries are doing. The Job Support Scheme will simply result in mass redundancies as very few businesses will be able to afford retaining staff from the end of October, irrespective of what they think the future holds.
 

Alistair20000

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What will be interesting will be the nature of the job losses. If these are relatively unskilled jobs in hospitality etc the argument that an expensive furlough scheme is needed to preserve skills rather falls down.

This is not to say that the unskilled losing their jobs should be ignored of course. As The Upstart points out there is support through UC.
 

The Proper Chap

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Stroudy, you say very few businesses will be able to pay staff in a month, I think that is a rather extreme view.
 

Alistair20000

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You're right of course - 'normality' has never stood still and certainly won't look the same either side of a pandemic.

But remember, furlough isn't cost neutral to employers, they currently have to pay staff NI & pension contributions, 10% of wages (rising to 20% next week) plus anything over the 80% & £2500 per month limit imposed by government if they choose to top-up staff wages, as well as overheads on business premises and infrastructure designed for a bigger workforce. No business would retain staff on furlough under these circumstances unless they genuinely believe that it is in the long-term interest of the business and that there are going to be jobs to return to - when that may happen will depend very much on the type of business, type of job, and the ups and downs and vagaries of local lockdowns over the coming months, but who better to decide whether furloughed employees still have a future, and remain affordable, than the businesses themselves?

IMHO the furlough scheme needs to be retained throughout the winter, as other countries are doing. The Job Support Scheme will simply result in mass redundancies as very few businesses will be able to afford retaining staff from the end of October, irrespective of what they think the future holds.
I think you might be over egging it a bit here Stroudy.
 

tavyred

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I can’t find the link now, but I saw one report where the much predicted 3-3.5 million job losses had been downgraded to a still bad 1.5 million. Despite payrolls reducing by 700K since the crisis began we’ve only seen a small uptick in the unemployment rate from 3.9% to 4.1% (it’s 7.2% in the eurozone incidentally) so unlike the 80’s it would appear that a lot people are choosing economic inactivity like retiring early or simply living off their partners wages rather claiming out of work benefits. That may change big time when furloughing ends in October obviously.
Job vacancies went up to 400K in August, so again I don’t think we are going to witness Thatcher era mass unemployment. Tough times ahead for some though.
 
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