Rishi Sunak has announced a five-month winter extension to the furlough scheme, ending days of confusion over whether support would be offered to Scottish workers in the event of a future lockdown.
After a week of pressure from the devolved governments and businesses, the Chancellor revised his initial furlough offer – which tied in with England’s month-long shutdown – and extended the scheme until the end of March.
Under the Chancellor’s plan, the less generous job support scheme will be suspended and workers will again have 80% of their wages paid for by the Treasury.
Support for the self-employed will also return to more generous levels, with grants of up to £7,500 on offer.
Mr Sunak said: “I’ve always said I would do whatever it takes to protect jobs and livelihoods across the UK – and that has meant adapting our support as the path of the virus has changed.
The upfront guaranteed funding for the devolved administrations is increasing from £14bn to £16bn.
This Treasury is, has been, and will always be, the Treasury for the whole of the United Kingdom. pic.twitter.com/apwPmNKQrb
— Rishi Sunak (@RishiSunak) November 5, 2020
“It’s clear the economic effects are much longer lasting for businesses than the duration of any restrictions, which is why we have decided to go further with our support.
“Extending furlough and increasing our support for the self-employed will protect millions of jobs and give people and businesses the certainty they need over what will be a difficult winter.”
‘Businesses have gone bust’
Prior to Mr Sunak’s speech, ministers had been ducking questions from the press and MPs over whether furlough support would be granted to workers in Scotland, Wales and Northern Ireland beyond the end of England’s lockdown on December 2.
Shadow chancellor Anneliese Dodds slammed the uncertainty caused, saying it had cost jobs.
She said: “Businesses and workers have been pleading for certainty from this government, but the Chancellor keeps ignoring them until the last possible moment, after jobs have been lost and businesses have gone bust.
“This is the Chancellor’s fourth version of his winter economy plan in just six weeks, he can change his mind at the last minute, but businesses can’t.
“We need a Chancellor who is in front of the problems we face, not one who is always a step behind.”
Pleased to see Furlough extended but these are cliff edge u-turns and the delay has already cost jobs and businesses. We shouldn't be expected to be grateful for what should and could have been done (and a lot more still needed) months ago – and only forced through SE lockdown https://t.co/BPFuTRVzF8
— Drew Hendry MP (@drewhendrySNP) November 5, 2020
‘Thousands have already lost their jobs’
The SNP’s Treasury spokeswoman, Alison Thewliss, also hit out at the delay, saying it was a “democratic disgrace that Westminster was only willing to act when England faced lockdown and not when Scotland needed support”.
She added: “For many it is far too late. Thousands have already lost their jobs, many good businesses have gone under, and millions have been excluded completely.
“By withholding funding and blocking the devolution of financial powers, the Tory government has hindered Scotland’s ability to respond to this crisis.”
The Chancellor dismissed her remarks, saying his statement would “reassure” the people of Scotland.
He said: “The furlough scheme was designed and delivered by the government of the United Kingdom on behalf of all the people of the United Kingdom – wherever they live.
“That has been the case since March; it is the case now; and will remain the case until next March.
“It is a demonstration of the strength of the union – and an undeniable truth of this crisis – we have only been able to provide this level of economic support because we are a United Kingdom.”
In response Mr Sunak also announced an increase in the upfront guarantee of funding for the devolved administrations from £14 billion to £16 billion, of which £1 billion will go to Holyrood.
His statement came after the Bank of England said it was pumping an extra £150 billion into the economy.
The Bank warned the resurgence of Covid-19 would lead to a slower, bumpier recovery.
Around £40 billion has been spent on the furlough scheme, which pays 80% of workers’ wages up to £2,500, since it was introduced in March.
FSB says ‘this will help’
Responding to the announcement, Mike Cherry, chairman of the Federation of Small Businesses, said: “We are pleased that the Chancellor has listened to calls to help both groups of members that FSB champions – small employers and the self-employed.
“At a time of unprecedented restrictions, this will help small employers and the self-employed to mitigate some of the economic damage.”
Kate Nicholls, chief executive of trade association UK Hospitality, added: “The extension of furlough to the end of March will make a huge difference in helping to protect hospitality jobs across the whole of the UK.
“Hospitality is facing a tough winter so this enhanced support is crucial and will safeguard jobs and help businesses to plan for more certain future.”