Businesses back five months of furlough but call for clearer plan
BUSINESS leaders have welcomed the Government’s £6 billion-a-month extension to the furlough scheme, while experts called for a clearer plan.
Thousands of firms face complete closure at some point over winter as the second wave of coronavirus forces areas into lockdown.
Nicola Sturgeon warned earlier this week that some areas would have to move to the highest level of restrictions, tier four, if improvements were not seen on virus spread.
The extra support will now be able to help them if they are forced to close.
The Chief Executive of the Scottish Tourism Alliance, Marc Crothall, said the Chancellor’s announcement was a “huge relief” to firms in his industry, but urged the Scottish Government to use the extra cash to bridge the gaps for those who have not been eligible for support.
He said: “Furlough alone will not help the industry to survive as we move into what has now become known as ‘the third winter’ for the sector.
“Both UK and Scottish governments must continue to recognise the urgent need for more robust funding to be channelled into the sector by way of additional grants so that businesses can remain solvent through to spring 2021.
“There continues to be gaps in government support as some in the industry remain excluded from these schemes, and there are many in the vital supply chain that will also need to be assured of guaranteed grant support to help them through the winter months.
“We very much hope that the both governments recognise this and that the additional £1bn made available to the Scottish Government will allow them to allocate realistic sums to address those gaps and provide a sufficient level of grant support to tourism and hospitality businesses in the coming weeks ahead.”
Dr Liz Cameron, Chief Executive of the Scottish Chambers of Commerce, said the plans were welcome, but there had to be a renewed focus on re-opening the economy.
She said: “This announcement gives Scottish businesses a glimmer of hope that we may be able to survive and work through this crisis.
“What we cannot do is to continue with uncertainty which is impacting business confidence, employee motivation and our ability to plan and invest.
“Movement in the management of the virus must be towards the re-opening of the economy, with
support such as the furlough scheme available to support businesses if restrictions need to be imposed. However, the furlough scheme alone will not be enough to save businesses so the Chancellor must continue and expand his commitment to providing businesses with guaranteed grants support to help businesses recover.”
Dr Cameron said it was vital that the Scottish test and trace capability was expanded as it was a “key enabler to keeping the economy open”.
Think tank the Resolution Foundation said the scheme will cost the Treasury around £6.2bn per month to run.
Its chief executive Torsten Bell said that while the furlough scheme will
save jobs, the grants for the selfemployed will not be as successful.
He explained: “Support for firms and workers through a difficult winter is welcome, but it is hard to conclude that the messy process of returning economic policy to full lockdown mode via a two-month, five-stage U-turn is anything other than deeply sub-optimal.
“The extension of the furlough scheme will help to protect millions of workers’ incomes in the tough months ahead. Sadly the same cannot be said for the self-employed. Too much of the £7.3 billion scheme is being wasted on workers who didn’t need any help, while it offers nothing for close to 500,000 self-employed workers who have no work at all.”
There continues to be gaps in government support