One of the great puzzles emerging from the last year has been why, in spite of COVID, repeated lockdown, and surging self-isolation, recruitment agencies have seldom been busier.
Employment levels are still rising and unemployment has – so far – not become the scourge many anticipated.
In theory, such a tight labour market should generate increased salaries, and employers’ wage costs should be rising. But, overall, they aren’t.
One explanation is that in the unique circumstances of the pandemic, employers have been forcing new, less favourable, terms on their employees.
Many workers are accepting new terms, knowing that if they don’t they may be dismissed or made redundant and then have to compete for jobs they have done for years – only with less pay and fewer benefits – a practice that has become known as “fire and rehire”.
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Employers argue that COVID has accelerated change in the workplace that means that they need new kinds of flexibility from the workforce – over work breaks, or severance packages, for example – or else they will go out of business.
In straitened times, the alternatives, as they see it, are lower wages or fewer jobs.
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Research by the TUC suggests that nearly one in 10 workers have been asked to reapply for their jobs since the start of lockdown in March 2020, with young people and minorities more likely than most to face the pressure.
Image: BA was accused of using the controversial tactic as it cut jobs during the pandemic
Major disputes have blown up in big employers such as British Airways and British Gas.
Amina Patel, a worker in adult social care in the London borough of Tower Hamlets, told me that for many of her colleagues, currently voting on a strike proposal over the issue, their anger isn’t just about money.
“It’s disrespectful. It makes you angry,” she said.
“The biggest betrayal was being fired and rehired at the height of the pandemic after everything we’d given, and still continue giving.”
Tower Hamlets Council said they “consulted extensively” with staff over changes to terms and conditions and that “no staff are on worse conditions, or pay, or have been dismissed as a result of the changes”.
Labour backbencher and former leadership contender Barry Gardiner has now tabled draft legislation that would make the practice of “fire and rehire” unlawful.
Image: Barry Gardiner says a change in the law is needed to protect workers
He wants to “stop managers intimidating the workforce… and going for the nuclear option right from the beginning. What I want to see is proper negotiation”.
He claims cross-party support, and points to Boris Johnson’s condemnation of employers who use dismissal as a negotiating tactic.
The government has asked ACAS to come up with new guidance for employers, though Mr Gardiner insists that change will only come through legislation.
Either way, research by ACAS makes clear that as furlough and other COVID support measures are withdrawn, the fight over “fire and rehire” is likely to become both more intense and more widespread.
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He will also be talking to Housing Secretary Robert Jenrick and Shadow Health Secretary Jonathan Ashworth.
Ministers will this week unveil a revamp of the Whitehall investment hub that they hope will secure hundreds of billions of capital flows into the UK in the coming years.
Sky News understands that Baroness Gustafsson, the investment minister, will address a private event on Thursday designed to relaunch the Office for Investment (OfI).
Government sources said the revamp – in which Sir Keir Starmer’s top officials and the Treasury have been closely involved – would align the UK’s ‘investment resources’ under a single brand.
The new OfI has absorbed teams from other Whitehall directorates with the objective of reducing confusion among international investors in Britain, according to the sources.
Greg Jackson, the Octopus Energy chief, and Baroness Lane Fox, who chairs the British Chambers of Commerce, are expected to speak at the event in central London alongside senior government officials, according to people familiar with the agenda.
Thursday’s summit will come days before ministers launch the new industrial strategy, with the OfI charged with targeting investors in priority sectors such as clean energy, advanced manufacturing and life sciences.
A beefed-up investment hub was among the key recommendations of the former business minister Lord Harrington’s review – commissioned by then-chancellor Jeremy Hunt – in 2023.
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One insider said last year’s International Investment Summit, at which ministers claimed to have drawn £63bn of new investment for the UK, provided a solid foundation for the revamped OfI.
A further event designed to attract inward investment will be held in Birmingham later this year, the chancellor, Rachel Reeves, announced on Wednesday.
The Department for Business and Trade declined to comment on Wednesday afternoon.
The Post Office is considering selling assets or taking on new borrowings to help deliver an ambition to boost sub-postmasters’ pay by £120m this year, its chairman has said.
Sky News has learnt that Nigel Railton, who was confirmed as the state-owned company’s long-term chair last week, told thousands of branch managers that it had ring-fenced £86m so far to increase their remuneration.
In a speech delivered in Chesterfield, Mr Railton is understood to have told sub-postmasters that the Post Office’s board was redoubling its efforts to meet the target of up to £120m for pay rises.
The company was exploring options including additional cost-savings, further asset sales, sale-and-leaseback opportunities, and borrowing options, he told them.
One source said Mr Railton had said on Wednesday morning that without actions already taken by Post Office management, sub-postmasters would be left with pay increases this year of just 2%, rather than the 20% it had now secured.
The progress towards its £120m target comes just three months after the Post Office chairman was forced to deliver a bleaker prognosis to thousands of sub-postmasters keen to have their faith restored in the scandal-hit company.
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In March, Mr Railton said he had yet to gain certainty from Whitehall about a £120m increase for this year.
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“Our funding discussions are positive and ongoing, but I want to be honest that we are operating in a challenging financial environment,” he told them at the time.
The Post Office is reliant on funding from the government, and last November outlined plans for an ambitious transformation of its business, which includes a substantial number of job cuts.
It remains hopeful of making up the £34m shortfall to reach its £120m target, according to insiders, as it seeks to rebuild its public and internal reputation in the aftermath of the Horizon IT scandal.
A Post Office spokesman confirmed Mr Railton’s remarks on Wednesday.
Elon Musk has criticised US President Donald Trump’s tax and spending bill, calling it “outrageous” and a “disgusting abomination”.
The bill, which includes multi-trillion-dollar tax breaks, was passed by the House Republicans in May, and has been described by the president as a “big, beautiful bill”.
The tech billionaire hit out at the tax cuts on his platform X, writing: “I’m sorry, but I just can’t stand it anymore.
“This massive, outrageous, pork-filled Congressional spending bill is a disgusting abomination.
“Shame on those who voted for it: you know you did wrong. You know it.”
Image: Elon Musk left his ‘special government employee’ role last week. Pic: AP.
In American politics, “pork” is a political metaphor used when government spending is allocated to local projects, usually to benefit politicians’ constituencies.
The White House brushed Musk’s comments aside, claiming they did not surprise the president.
In a press conference on Tuesday, press secretary Karoline Leavitt said that “the president already knows where Elon Musk stood on this bill”.
She added: “This is one, big, beautiful bill.
“And he’s sticking to it.”
The White House on Tuesday asked Congress to cut back $9.4bn in already approved spending, taking money away from DOGE.
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What did Musk achieve at DOGE?
The billionaire tweeted: “It will massively increase the already gigantic budget deficit to $2.5 trillion (!!!!) and burden American citizens with crushingly unsustainable debt.”
He also suggested voting out politicians who advanced the president’s tax bill.
“In November next year, we fire all politicians who betrayed the American people,” Musk wrote in another X post.
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Questions have also been raised about whether the department has actually saved taxpayers as much money as suggested.
Musk initially had ambitions to slash government spending by $2trn (£1.5trn) – but this was dramatically reduced to $1trn (£750bn) and then to just $150bn (£111bn).
Image: Elon Musk brought his son X Æ A-12 to the Oval Office during a press conference earlier this year. Pic: Reuters.
He recently told The Washington Post: “The federal bureaucracy situation is much worse than I realised. I thought there were problems, but it sure is an uphill battle trying to improve things in DC to say the least.”
By law, status as a “special government employee” means he could only serve for a maximum of 130 days, which would have ended around 30 May.