Page last updated at 23:02 GMT, Saturday, 30 May 2009 00:02 UK

Wage subsidy call for small firms

Wage slip
The wage subsidy scheme is already operating in Wales

A subsidy scheme should top up workers' wages at firms worst hit by the recession, it has been claimed.

The Federation of Small Businesses in Scotland and the Scottish Trades Union Congress are calling for a scheme similar to one introduced in Wales.

Small companies can get a training subsidy of £2,000 and £2,000 towards the wages of each worker.

They must demonstrate they are on short hours and "seriously" considering redundancies.

Support package

Andy Willox, FSB's Scottish policy convener, said: "The Scottish Government should be at the forefront of innovative methods to help small businesses weather this storm and capitalise on the upturn when it comes.

"When people become out of work, their skills and their experiences are lost to the economy at large.

"Every tool at the Scottish Government's disposal should be used to ensure that Scotland's communities do not lose another generation to the spectre of unemployment."

The temporary support package would be aimed at small businesses which have introduced short-time working and are considering redundancies.

STUC general secretary Grahame Smith said more government intervention was necessary to sustain jobs and skills at serious risk from the "sudden and unprecedented collapse" in global demand.

"The STUC and FSB both recognise that a poorly administered scheme would risk incurring high dead-weight costs," he said.

"That is why we are proposing tight eligibility criteria and assessment by an appropriately skilled independent panel.

"In Scotland we are only too aware of the long-term costs associated with failing to react to rising unemployment.

"Investment now through a wage and training subsidy initiative will help both cushion the human cost of recession and upskill the economy for the challenges ahead."

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Will wage subsidies help Wales?
09 Apr 09 |  Wales

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