The Labour Party is calling for a new wage subsidy scheme to protect companies at risk of collapse over soaring energy prices.

On Newstalk Breakfast this morning, the party’s employment spokesperson Marie Sherlock said the subsidy would protect jobs where companies are at risk.

She suggested many companies are concerned about their ability to trade on a full-time basis through the winter – and the subsidy would assist workers who are forced to go part-time or are temporarily laid off.

“I know there are people driving to work this morning worried about their jobs, worried about the continuation of their incomes and of course that continued ability to pay their bills,” she said.

“When a firm decides that they either need to stop production for a number of weeks or slow down production for a number of weeks, often in this country what happens is that a worker is put on what we call temporary lay-off.

“So, we are looking at countries like Germany and indeed other country across the EU which have a short-term work scheme in place. Effectively it supports workers incomes for the days they don’t work.

“We’ve done this during the pandemic and we need to support incomes.”

Wage subsidy scheme

Senator Sherlock said businesses have expressed “very real concerns about their ability to trade on a full-time basis over the winter months because of issues associated with the increase in their fuel bills.”

She said her proposed scheme would only be available to a small number of companies.

“It would have to have very strict conditions and eligibility criteria put in place in order to access it and it would have to co-funded by the State and employers,” she said.

“This would be a last resort for employers so it is not a first resort to put employees on short-term working.

“If they are forced into short-term working, as we envisage some manufacturing firms and indeed firms in other sectors may do, what we want to ensure is that workers are not facing a cliff-edge in their earnings because of their situation – that they are supported with regard to their mortgage and everything else.”

Cost

She said the proposal can’t be costed because it is not clear how many companies would need to use the scheme.

“Ultimately this should only run to a small number of millions of Euro over the winter months,” she said. “We’re not talking about billions here.

“Ultimately for those who are in their cars this morning and thinking about how they are going to pay their mortgage with rising interest rates and all the other bills, we need to provide some sort of assurance that those jobs will not be lost and that firms and workers can be supported though this rough period over the coming months.”

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