Finance Secretary Kate Forbes has warned the UK Government that many struggling Scottish businesses still need to be supported with “hard cash”.
As the furlough scheme begins to be scaled back from today, the SNP minister argued that the Treasury’s timetable should instead be “tailored to the exit of lockdown”.
Prime Minister Boris Johnson ruled out any extension to the Coronavirus Job Retention Scheme when he was challenged in the Commons on Wednesday.
From today, employers will have to pick up 10% of their furloughed workers’ salaries, rising to 20% in August and September.
It means that the cost of keeping someone who earns £20,000 per year on the books will rise from £155 in June to £322 in July and finally £489 in each of the two following months, according to the Institute for Fiscal Studies (IFS).
Speaking on the BBC’s Good Morning Scotland radio programme, Ms Forbes said: “I think most businesses would tell you that what really matters right now is hard cash.
“So having been through 15 months of lockdown, looking fairly big debts in the eye, what they need right now is financial support.
“Here in Scotland, of course, we extended non-domestic rates relief at 100% for a full year, the only place in the UK to do so, in order to reduce costs.
“But we are also extending business grants for those businesses that are still shut down, because it is cash they need and it is cash that will be absorbed when furlough disappears.”
“I think most businesses would tell you that what really matters right now is hard cash.”
The furlough scheme was announced in the early days of the pandemic on 20 March 2020, supporting 11.5 million jobs at various times, and cost about £58 billion in the first year.
Ms Forbes said: “It feels a bit like déjà vu. We had these debates last summer when we called for furlough to be provided for as long as it was needed.
“Now we know, as of the end of April, that 11% of eligible jobs in Scotland were still being supported by furlough.
“What is key is that will be largely in industries or sectors that can’t open yet, and our position is that furlough is needed to support those jobs in sectors where they are still perhaps facing some restrictions, and will continue to do so for longer than elsewhere.
“So they should be able to get that support.”
The Skye, Lochaber and Badenoch MSP added: “I think that the furlough scheme should be tailored to the exit of lockdown and we hope very much that we will be back to normality as soon as possible, but we are not there yet.”
Challenged by SNP health spokeswoman Dr Philippa Whitford at prime minister’s questions on Wednesday, Mr Johnson ruled out extending the furlough scheme, despite soaring case numbers.
The Conservative leader said: “No, because although the Delta variant is indeed seeded and growing in at least 74 countries around the world, including this one, this is the only country or the country where the protection by immunity against the Delta variant is the highest and the strongest.
“And that’s why we’re going to continue with our cautious but irreversible road map and I hope it will command her support.”