Tony Wilson from the Institute of Employment Studies provides practical solutions to keep people in paid work whilst also helping people into work.
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Good to see serious debate now on how we support those losing money and jobs due to covid-19. Top two priorities must be to keep people in paid work and to get money quickly and efficiently to those out of work. Here’s some proposals for how.
First, nearly 80% of us are in work so top priority must be to min. job losses and give financial relief for unpaid leave, short-time working. We don’t have a system for this. Some employer bodies are calling for ‘temporary lay-offs’ and UC to pick up slack. This is wrong.
Why make people claim for a complicated benefit with a long delay when they’re on your payroll already? Far better for employers to pay, and govt to reimburse – thru emergency loans if needed. The best way to do this is to repurpose SSP to cover temp unpaid leave.
Next, there are 1.9m workers who aren’t entitled to SSP cos of their low earnings. There is a quick and easy fix here, to remove the Lower Earnings Limit in National Insurance. That way if you’ve got a contract you get SSP, no uncertainty or exceptions.
SSP is also too low – just one quarter of a full time min wage. Most employers don’t pay more than this. So we need to raise SSP, I’d suggest to £175/ week, or 50% of min wage. Some are calling for setting it at % of salaries. Maybe, but I’d prioritise a flat rate for all.
Employers need to be reimbursed for all of this, at least in the short term. From experience, reclaiming SSP is fiddly and takes time to come through – so may need to emergency loans and good will to cover.
All of above would be great but not enough – 5m self-employed don’t get SSP, and many will be made redundant as companies close. So benefits system needs to step in. Given urgency, we need to use existing system – as Torsten Bell of the Resolution Foundation has said, this isn’t time to test UBI etc.
So this means UC and our contributory benefits (New Style JSA and ESA). The rates for these are far too low – just £73/ wk. So we need to increase, at least temporarily. To at least £100/wk. Also need to pay quickly and make full use of Advances for those in hardship.
At same time, Housing Benefit has been gutted over ten years while rents have risen. Many renters will find themselves in significant arrears v quickly. So we need some urgent ££ in the HB system – e.g. raise the Local Housing Allowance rate to median for first month.
Finally, in all of this, important not to forget that there are still jobs and many sectors will be desperately short of people in coming weeks and months – distribution, caring, health services, JCP, local govt.
So it’s imperative that we keep supporting those out of work to find jobs, and keep working with employers to fill vacancies. Govt can’t do this alone – as with last recession, needs to involve recruiters, employment services, community sector.