The Courier & Advertiser (Angus and Dundee)
Call for clarity over future of furlough funding for Scots
Chancellor Rishi Sunak is facing fresh calls to clarify whether he would help fund the continuation of the job retention scheme in Scotland if it remained in lockdown for longer than England.
The so-called “furlough” programme is paying 80% of the wages of more than a quarter of workers in the UK, and Mr Sunak confirmed yesterday it would be extended until the end of October.
However, businesses are now due to be asked to pay a greater share of employee salaries from August onwards.
Prime Minister Boris Johnson has also begun easing lockdown arrangements more quickly in England than in the rest of the UK.
The divergence has led to fears of a constitutional clash if the Scottish Government has to ask the UK Treasury to help pay to keep staff off work for longer in Scotland than south of the border.
The current furlough programme is administered by HM Revenue and Customs and funded through the Treasury. Most experts agree that the Holyrood government does not possess sufficient borrowing powers to bankroll an extension itself.
Known as the coronavirus job retention scheme, the unprecedented government intervention was aimed at avoiding millions of job losses and business closures during the crisis caused by the coronavirus pandemic.
Under the system, workers who are “furloughed” remain employed even though they are not working, with the UK Government paying 80% of their salary up to £2,500 each month.
It came into effect on April 20 but claims could be backdated to March 1. It had already been extended from the end of May to the end of June.
Figures show the scheme has helped support about 7.5 million workers, close to 30% of the UK workforce, and a million businesses.
Malcolm Cannon, national director at the Institute of Directors in Scotland, said: “We are pleased to see the calls for a flexible furlough... have been heard.
“However, as exit plans may differ north and south of the border, it’s important that further clarity around this extension is provided.”
In the Commons, SNP MP
Alison Thewliss quizzed Mr Sunak on whether he would commit to ensuring the scheme remained in place in devolved nations if required.
The chancellor responded: “This is now an extension for four months to the end of October, which it will provide eight months of support in total to all regions and all sectors of the United Kingdom.”
Speaking afterwards, a Treasury source said: “We’ve already provided five months’ worth of certainty today. If the question is, are we going to be staying in close touch with the devolved administrations going forward? Absolutely.”
SNP Economy Secretary Fiona Hyslop welcomed the extension of the scheme until October, and was “particularly pleased” about new flexibility from August to enable staff to return to work part-time.
But she queried: “What employers will be asked to contribute to the costs of the scheme, how any changes will relate to guidance on safer workplaces in each of the four nations, how workers in isolation will be supported and what additional support might be provided to industries, such as tourism.”
Liz Cameron, chief executive of the Scottish Chambers of Commerce, described the chancellor’s announcement as “great news”.
She said: “This direct employee financial support has been a lifeline which has enabled many jobs to be retained.”
Andrew Mcrae, the Federation of Small Businesses Scotland policy chairman, said: “Today’s shrewd decisions from the chancellor will give thousands of Scottish employers the right sort of flexibility.”