One third of working Scots now being paid by the state
●Furlough and other government aid supporting quarter of a million jobs
Fears of mass unemployment in Scotland as the nation exits the coronavirus lockdown have been raised after official figures revealed a third of the workforce is either on furlough or receiving financial support from the state.
In total, the UK government is paying the salaries of more than three quarters of a million Scots, at a cost of £425 million.
Around 628,000 furloughed Scottish workers are having their wages paid through the Coronavirus Job Retention Scheme, with another 146,000 self-employed workers benefitting from a grant scheme, Treasury figures revealed.
Ministers welcomed the figures as a demonstration of the UK government’s ability to support the Scottish economy in hard times and save hundreds of thousands of jobs. But they came amid news of 5,000 job cuts at Scottish Gas owner Centrica, and 2,500 redundancies at manufacturing giant Johnson Matthey. On Wednesday, Scottish group Macdonald Hotels warned that 1,800 jobs are at risk.
The SNP warned yesterday that with UK ministers refusing to extend the
furlough scheme if Scotland takes a slower route out of lockdown, Scottish workers could find themselves out of pocket.
And there were warnings that, with government support schemes set to be tapered from August and wound up by October, industries that are unable to fully reopen – such as hospitality, tourism and aviation – may shed more jobs and send the unemployment rate skyrocketing.
Yesterday’s figures cover the period up to 31 May, across a wide range of sectors including retail, agriculture and construction.
More than 58,000 people have been furloughed in Edinburgh, with 74,400 receiving supportintheglasgowregion.
SNP Treasury spokeswoman Alison Thewliss said it was “vital that the Treasury strengthens and extends support schemes – rather than pushing ahead with its plans to restrict and strip back the Job Retention Scheme and Self-employment Income Support Scheme”.
Chancellor Rishi Sunak said the UK government was “doing everything we can to protect jobs and businesses in Scotland and across the UK during the crisis”.
Scottish Secretary Alister Jack added: “People and businesses in Scotland have also benefited from Uk-wide schemes such as VAT deferral, company loans and Universal Credit. In addition, the Scottish Government has been allocated an extra £3.8 billion in coronavirus funding through the Barnett Formula.”
Despite unprecedented government support for businesses and workers through the lockdown, some employers have said job losses are inevitable as the UK enters a what is expected to be the deepest recession in generations.
The OECD has predicted the UK will be the worst hit of the world’s major economies, with GDP shrinking by nearly 12 per cent this year.
Hospitality and tourism businesses are set to be the worst hit, with travel bans wiping out the summer season and two metre social distancing restrictions putting the viability of pubs and restaurants in doubt, even after lockdown is lifted.
Former Scottish Secretary Lord Forsyth said the UK was facing an economic “catastrophe” with millions of jobs at risk of being swept away by a “great tsunami”.
Lord Forsyth told peers: “A great tsunami is going to sweep away the jobs of many people, who thought they were in secure employment.
“It is not beyond the bounds of possibility that we could be looking at three million or more people with no jobs.”