Call for furlough scheme to be extended

THE Welsh Government has called on the Chancellor of the Exchequer to continue the job retention scheme – warning the Welsh economy could go over a cliff edge.

Economy Minister Ken Skates said he and Finance Minister Rebecca Evans had written to Rishi Sunak asking for the furlough scheme to be extended to a second phase.

The coronavirus job retention scheme, which covers 80% of workers’ pay, is due to run until June 1 and there are fears firms could start to cut staff unless the Government clarifies whether the scheme will be extended.

He told the Senedd’s economy, infrastructure and skills committee that the Welsh Government was arguing for the scheme to be extended for sectors, such as tourism, aviation and steel.

“Some evidence has been published recently which suggests that in parts of the UK, including Scotland, unemployment could hit 30% if there is a sudden removal of the job retention scheme,” he said.

“It is absolutely vital we don’t go over a cliff edge at the end of June and that scheme progresses into a second phase.

“We do recognise this scheme has been a godsend for many businesses and I congratulate the Chancellor for developing this scheme that has been so instrumental in keeping people with a degree of income that otherwise they would not have had.

“It is vitally important now that this scheme is not removed prematurely.”

Mr Skates also said that he expected to be able to make an announcement soon about the future of the remaining £100m from the £500m Welsh Government Economic Resilience Fund.

“There is a need for the job retention scheme to be prolonged because that will make a decisive difference to the success or failure of certain sectors, including tourism and aviation.

“In addition to what we can do in Welsh Government, the UK Government support schemes that are already operating really need to be extended to further in the future.

“The UK Government has by far the deepest pockets and therefore the greatest ability to intervene and support those sectors which are going to require a greater period of hibernation or nursing into the future.

“While we’ll be able to make investments, those budgets do not come anywhere near what is available to UK Government ministers.”