The UK government should join us to create a fair and resilient economy | Frances O’Grady, general secretary of the TUC

Once again we start a new year with the country in the grip of Covid-19.

But as 2022 dawns, the UK should have been better prepared for the disruption of a new variant.

In March 2020, the TUC and unions pressed the chancellor to adopt our detailed proposals for a furlough scheme – an emergency response to the first wave of the pandemic. It was a huge success – protecting millions of jobs, keeping businesses open, making the reopening smoother and quicker and making sure families all over the UK could pay their bills.

Now, as we face Omicron, we’re having the same old argument about whether government should step in and protect working people’s livelihoods in a crisis.

It’s been clear for months that the UK needs a permanent short-time working scheme, learning from the success of furlough, to protect jobs during periods of economic turbulence.

Such schemes are common across Europe and help keep businesses afloat when there is a sudden temporary collapse in demand. But ministers have chosen not to listen.

After cutting off furlough prematurely in the autumn, the government watched as Omicron hammered our arts, hospitality and aviation sectors in the run-up to Christmas.

While the chancellor’s 11-hour rescue package for pubs, restaurants and theatres will help some, serious damage has already been done to pay packets and to livelihoods. We need to end this stop-start approach to managing our economy.

Real UK household incomes

Businesses and working families shouldn’t be put through an emotional rollercoaster every time the pandemic flares up. They need financial certainty and stability so that when better times return our economy can bounce back fast.

Having a permanent short-time working scheme in place, conditional on upskilling and retraining, will ensure that if new restrictions have to be imposed again there is support ready to go. But we can’t stop there. We need to build an economy that can help working families face the future with confidence.

There are huge challenges on the horizon. Alongside Covid, climate change is already causing global chaos and threatening jobs in energy intensive industries like steel and manufacturing. The longer we put off getting to net zero, the more jobs will be put at risk.

And let’s not forget the looming cost-of-living storm. The last 11 years have been the worst period for real wage growth since the Napoleonic wars. And this has come at a huge cost to people’s living standards.

Over half of families in poverty today are working families. And many of our key workers – keeping hospitals and public services running – are still earning less in real terms than in 2010. It’s a national disgrace. Without action, the pressure on UK household budgets will only get worse in 2022.

This spring, working families face a triple whammy of skyrocketing bills, cuts to universal credit and a hike in national insurance contributions. We urgently need a long-term economic plan for getting wages rising.

And the best way to start is by getting more workers covered by collective agreements, sector-by-sector – so they can negotiate a fair pay rise with employers. Giving trade unions greater access to workplaces is the key to boosting pay and employment standards across the country.

And it’s not just me saying this. The OECD and governments across the world, from America to New Zealand, have recognised the key role collective bargaining can play in reducing inequality and giving people security at work.

Committing to industry-wide fair pay agreements would transform the lives of millions by setting minimum standards – on pay, training, health and safety – and prevent good employers from being undercut by the bad.

And fair pay agreements would help ease staffing shortages in under-pressure sectors like logistics, food production and social care, by making those industries better places to work in.

Whether they can boost living standards and working conditions is the acid test of the government’s levelling up agenda.

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Alongside campaigning for a pay rise for working people, we are still waiting for the employment bill Boris Johnson promised over two years ago. Tackling insecure work, outlawing fire and rehire and banning zero-hours contracts – all are long overdue.

As too is fixing our broken sick pay system. It beggars belief that we are heading into another wave of the pandemic with millions unable to afford to self-isolate.

This year is a crossroads. Beset by pandemics and climate chaos, we can keep reeling from crisis to crisis, unleashing rampant insecurity and inequality anew. Or we can harness the power of active government – in partnership with unions and employers – to create a fairer and more resilient economy.

In this age of anxiety, working people are crying out for security. That is my wish for 2022.

Frances O’Grady is general secretary of the Trades Union Congress

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