Chancellor in Scotland
Sunak resists calls to extend furlough to avoid jobs cull
Rishi Sunak: warning of hard choices
Chancellor Rishi Sunak today resisted calls to extend the furlough scheme to prevent thousands of workers being dumped on the dole.
During a visit to Scotland he said the job retention scheme cannot “carry on indefinitely” and said it was “wrong to keep people trapped” in a situation where there was no realistic prospect of them having a job to go back to.
Mr Sunak met new Scottish Tory leader Douglas Ross and local businessmen in Glasgow and issued a reminder that more than 65,000 businesses in Scotland have benefited from £2.3 billion of UK loan support. A third of employees in Scotland (29.8%) benefitted from the furlough scheme, he said.
However, the Office for Budget Responsibility (OBR) forecasts that this winter unemployment across the UK will rocket to levels last seen in the early 1980s, with nearly one in eight workers left jobless.
Mr Sunak, who said at the outset of the coronavirus that the government would do “whatever it takes” to prevent the pandemic destroying the economy, insists the furlough scheme will end in October.
He said today that he is optimistic a lot of the emergency government-backed loans given to companies during the pandemic will be repaid.
“I remain optimistic that if we can actually drive our economic recovery forward then, we should be able to recover a lot of the loans,” Sunak told Sky News.
“Are some of those loans going to be written off? Absolutely. We’ve been very clear we won’t be able to say every single job, every single business.”
But he is also said to be warning Cabinet colleagues of “hard choices” as the bill mounts for supporting businesses and employees.
Ian Blackford: ‘thousands of people could lose their jobs’
As from last weekend employers have had to pay national insurance contributions and a portion of workers’ salaries which will be stepped up as the furlough scheme ends. Firms will be offered a small bonus to hold on to staff, but many will make redundancies.
In the past week alone there have been 10,000 job losses in companies such as WH Smith, Pizza Express, Hays Travel, Dixons Carphone, M&Co, DW Sports and Prestwick Airport.
Mr Sunak, meanwhile, has been spending more time promoting campaigns such as his “Eat Out to Help Out” discounts to help struggling hospitality businesses. Amid growing concerning over growing support for Scottish independence he also the latest Cabinet member to visit Scotland in the last two weeks, following trips north by the Prime Minister, the Chief Secretary to the Treasury and the Business Secretary.
The SNP’s Westminster leader Ian Blackford has been calling for the Chancellor to extend the furlough scheme and devolve borrowing powers to Scotland. He is unlikely to hear much about either.
“The Tory government isn’t taking the threat to jobs seriously enough – and as a result thousands of people could lose their jobs unnecessarily,” said Mr Blackford.
“Cutting the furlough scheme prematurely is a grave mistake. By removing this crucial support in the middle of a global pandemic, and withholding the financial powers Scotland needs for a strong recovery, the Tories are increasing the risk of mass redundancies.”
Mr Ross welcomed the Chancellor to Scotland saying he “has delivered in spades in the first stage of this crisis with the furlough scheme, tax breaks and support for Scottish business.
“As we move focus to our longer term recovery, we want to hear from job creators and workers in Scotland about how the heft of the UK Government can be used to keep Scotland’s recovery from the pandemic on track.
“Crucial to that will be getting all levels of government working together in Scotland. I know the UK Government is up for that and wants to work with the Scottish Government to deliver.
Douglas Ross: Chancellor has delivered in spades
“With the Chancellor in Scotland today, I’d urge the SNP to make the same positive noises – we need cooperation not confrontation to win this fight.
“Our recovery from the pandemic is too important to allow political differences to get in the way of positive action.
“The Scottish Conservatives under my leadership will set out our own plans over the coming weeks. It’s time to move Scotland forward with a new debate.”
New skills funding
Scottish Economy Secretary Fiona Hyslop announced that the Flexible Workforce Development Fund, which helps employers upskill and reskill their existing workforce, will be increased from £10 million to £20m for 2020/21.
A further £1.5m will be invested in Business Gateway’s Digital Boost programme – almost trebling the capacity of the initiative for the remainder of this financial year.
The programme supports small and medium-sized enterprises to take advantage of technology to help improve their productivity, increase their resilience and create new market opportunities.