Wage subsidy fund ‘would save jobs’

A wage subsidy fund to help companies avoid job cuts should be established by the government, according to industry organisations.


A wage subsidy fund to help companies avoid job cuts should be established by the government, according to industry organisations.

A wage subsidy fund to help companies avoid job cuts should be established by the government, according to industry organisations.

The Trades Union Congress (TUC) and the Federation of Small Businesses claim schemes to subsidise workers’ pay should be provided to companies considering temporary lay-offs and short-term wages.

Up to 600,000 employees a year could be supported at a net cost to the government of £1.3 billion, the groups say, following the example of successful short-term wage subsidy schemes already operating in France, Germany, Italy and Spain.

The proposals call for 60 per cent of a worker’s wage to be paid by a combination of the fund and Jobseekers Allowance, while those facing redundancy or cuts in working hours will be able to access government-funded training.

Brendan Barber, TUC general secretary, comments: ‘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.’

Recent research from the Confederation of British Industry claimed the service sector is losing jobs at the fastest rate for ten years, with declining business volumes and profitability being cited as reasons.

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