News and features

Tue, 8 Sep 2009

Short-term wage fund 'could reduce unemployment'

TUC urges government to provide short-term working subsidies for struggling employers.

A special fund to support employers moving to short-term working and temporary lay-offs could help to stem the flow of redundancies in the UK, the Trades Union Congress (TUC) has claimed.

With many firms forced to implement short-term working as the recession continues to squeeze operating budgets, the TUC has joined forces with the Federation of Small Businesses (FSB) to call for financial help for these companies.

Many European countries such as France and Germany already offer subsidies for short-term working, helping to prevent widespread job losses while supporting businesses through difficult times.

TUC general secretary Brendan Barber said that approximately 600,000 British workers could benefit from such a scheme in the UK.

He said: "UK unemployment is spiralling fast and we are now losing jobs twice as fast as the rest of Europe.

"Where they are needed, wage subsidy schemes provide a quick and effective way to cut costs for struggling businesses and vital financial help for hard-pressed employees."

With the Welsh Assembly government approving a short-term working subsidy scheme in November last year, FSB chairman John Wright urged Westminster to take similar action.

He said that a subsidy scheme would "give viable small businesses the support they need to keep people in jobs and pull the country out of recession".

Major employers such as accountancy giant KPMG have already implemented new working practices in an attempt to avoid redundancies and retain their skilled employees.

In January, KPMG announced that staff would be given the option of working a four-day week or taking a short period of extended leave at 30 per cent of their usual salary.

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