Rebuilding after recession: a plan for jobs

Introduction

The coronavirus pandemic has required governments across the world to shut down large amounts of economic activity to protect public health. Protecting lives must always be the first priority of government – and further measures will be needed to ensure that people’s jobs can be done safely.

The coronavirus job retention and self-employed income support schemes developed by government following representations to government by the TUC and unions have protected many jobs during this period, with nearly nine million employees and over 2.5 million self-employed people seeing their incomes supported by government. [1] But without further bold action by government, the economic slow-down poses huge risks to people’s jobs and livelihoods. The OECD estimates that unemployment could hit 11 per cent this year – just one of a range of estimates of sharply rising unemployment [2] with those groups who already face the greatest labour market disadvantage set to experience disproportionate impacts from the recession.

But these are predictions, not inevitable facts. A new plan for jobs, overseen by a National Recovery Council bringing together unions, business and government, can prevent the despair of mass unemployment. And designed right, it can help address some of the UK’s biggest challenges – the need to reach a net zero-carbon economy, to address persistent race, class, gender, disability regional and wider inequalities, and to deliver a higher skill and higher paid, more productive economy.

The lesson of the UK’s economic history is that investment is the most effective way to deliver growth following a recession, and to restore the public finances. We failed to learn this lesson in 2010 with devastating results. This time must be different.

The approach outlined in this report is aimed at supporting workers and businesses in the transition from lockdown, but also in the longer term to create decent work and a fairer society. Achieving this change will mean that GDP will be higher; unemployment will be lower; wages and incomes higher; and government action on climate change will stimulate innovation and create decent jobs. In turn, the higher tax revenues this enables will help government to pay off its debts.

This paper builds on our previous proposals in ‘A Better Recovery’ to set out plans to:

• bring forward investment with the potential to support 1.24 million jobs, and help the transition to net-zero, and invest across the public sector to support jobs
• establish sectoral recovery panels of unions, employers and government to develop sectoral route maps and support packages tailored to the needs of each sector that reflect the differing conditions across sectors and encourage businesses to deliver better jobs
• offer government support to individual businesses in the form of equity stakes, conditional on firms committing to put in place fair pay plans, pay corporation tax in the UK and promote decent jobs
• protect those who do lose their jobs with a new government funded jobs guarantee, increased training rights, and reforms to universal credit to prevent people spiralling into debt
• prevent people with protected characteristics experiencing disproportionate impacts, and prioritise progress towards equality rather than pushing it into reverse.