Calls for UK Government to extend furlough scheme further

Scotland’s economy secretary has written to the UK Government calling for coronavirus employment support to continue beyond October.

Fiona Hyslop wants Chancellor Rishi Sunak to either extend the schemes for furloughing workers and helping the self-employed, or to introduce sector-specific support, warning without this hundreds of thousands more jobs will be lost.

HMRC figures published last week show 628,000 jobs have been furloughed via the Coronavirus Job Retention Scheme in Scotland as of May 31, while there were 146,000 claims for Self Employment Income Support in the same period.

Currently, the UK Government pays 80% of wages for furloughed workers but employers will have to start paying National Insurance and tax contributions for staff in August, moving to 10% of furloughed wages in September and 20% in October, after which the support schemes end.

In her letter, Ms Hyslop said: “It is already clear that there will be some sectors of our economy – including tourism, hospitality, arts and culture, oil and gas, childcare, retail, and our rural and island economies – that will not have fully recovered by October, or who will continue to face restrictions.”

She added: “It is vital that the UK has a long-term approach in place so we can offer certainty to individuals and businesses about what support will be available to them beyond October, and we would like to work with you to ensure that support reflects the public health position in Scotland.

“The failure to do this will put the UK economy at a competitive disadvantage in recovering from this crisis and will result in hundreds of thousands of additional job losses.”

The economy secretary goes on to warn that without extended support businesses will either have to open when unsafe, risking a spike in coronavirus, or remain closed and take the financial hit, risking jobs.

A Treasury spokesman said: “Taken in its entirety, the UK’s wide-ranging package of support is one of the most generous in the world – including our unprecedented income support schemes, billions of pounds in loans, tax deferrals and more than £6.5bn injected into the welfare safety net.

“Our job retention scheme has protected 8.9 million jobs and will remain open until October, continuing to support businesses as the economy reopens.

“We will continue to look at how to adjust our support in a way that ensures people can get back to work, protecting both the UK economy and the livelihoods of people across the country.”