FURLOUGH SCHEME: Significant extra support to protect jobs and livelihoods

“This statement follows the Bank of England’s monetary policy decisions, meaning all economic and monetary institutions are playing their part. As the House [of Commons] would expect, the Governor and I are in constant communication as the situation evolves. Our responses are carefully designed to complement each other and provide certainty and support to people and businesses across the UK.
“The Bank’s forecast this morning shows that economic activity is supported by our substantial fiscal and monetary policy action.
“Just last week, the International Monetary Fund described the UK’s economic plan as “aggressive”, “unprecedented”, successful in “holding down unemployment” and business failures, and “one of the best examples of coordinated action globally”.

Chancellor Rishi Sunak added: “Our highest priority remains the same: to protect jobs and livelihoods. That is why we have already decided to extend the job retention scheme to December. But people and businesses will want to know what comes next, how long we plan to keep the scheme open, and on what terms. They want certainty.

“The Government’s intention is for the new health restrictions to remain only until the start of December, but, as we saw from the first lockdown, the economic effects are much longer lasting for businesses and areas than the duration of any restrictions. As the Bank of England has said, the economic recovery has slowed and the economic risks are ‘skewed to the downside’.

“Given this significant uncertainty, a worsening economic backdrop and the need to give people and businesses security through the winter, I believe it is right to go further, so we can announce today that the furlough scheme will not be extended for one month; it will be extended until the end of March.

“The Government will continue to help to pay people’s wages up to 80% of the normal amount; all that employers will have to pay for hours not worked is the cost of employer national insurance contributions and pension contributions. We will review the policy in January to decide whether economic circumstances are improving enough to ask employers to contribute more.

“Of course, as the furlough itself is now being extended to the end of March, the original purpose of the job retention bonus to incentivise employers to keep people in work until the end of January obviously falls away. Instead, we will redeploy a retention incentive at the appropriate time.

“For self-employed people, I can confirm that the next income support grant, which covers the period November to January, will now increase to 80% of average profits, up to £7,500.”

“I also want to reassure the people of Scotland, Wales and Northern Ireland. 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 it will remain the case until next March. It is a demonstration of the strength of the Union and an undeniable truth of this crisis that we have been able to provide this level of economic support only because we are a United Kingdom.

“I can announce that the up-front guaranteed funding for the devolved Administrations is increasing from £14 billion to £16 billion. This Treasury is, has been and will always be the Treasury for the whole of the United Kingdom.”

The SNP’s response came through Alison Thewliss (Glasgow Central), who said: “The reality is that Scotland, Wales, Northern Ireland and the north of England have been dingied by this Chancellor until he was forced to lock down in England.

“I am glad that furlough and the self-employment support scheme has been extended to March, but we should be clear that that kind of support is not unique to the UK. Countries of all sizes have been supporting their people, and many of them have done it more competently and more generously than the UK.

“Can he confirm that the furlough scheme is not tied to any particular tier and it will be available to all who need it at 80%? Will he refrain from cutting it back to 60%, as before, because that cost many businesses and many employees dearly? Many businesses are as good as closed, especially in hospitality, tourism, travel, events and culture, and they need ongoing support.”

She added: “I return to the issue of those excluded from the support schemes. It is disgraceful and unacceptable that there is still nothing in the statement for them after eight months. Can the Chancellor tell me why he is still choosing to ignore 3 million people across these islands? Many sectors of the economy in which they work are not going back to normal any time soon.

“I spoke to Scottish hospitality reps this morning and they are deeply worried about the winter months ahead. They are increasingly indebted, and 70,000 to 100,000 jobs are at risk. It would help them immensely if the VAT cuts that the Chancellor previously announced could be made permanent.

“I welcome the additional £2 billion for Scotland, because Scotland has been able to provide hospitality businesses with rates relief, but we need clarity on the future longer-term funding to plan ahead.

“A growing number of businesses cannot afford to pay for redundancies should they go bust, so what provision is the Chancellor making for supporting those who may yet lose their jobs as businesses go to the wall? Will he extend the £20 up-rating of universal credit into the year ahead as well? Will he expand it to legacy benefits, because those on legacy benefits are really struggling?

“Will he enhance statutory sick pay? Will he listen to Maternity Action and Pregnant Then Screwed on their demands for women to be kept safe and their incomes protected?

“This has been a complete bùrach, but it does not need to be. Will the Chancellor work with all parties and the devolved institutions? At the very least, could he give the Cabinet Secretary for Finance in Scotland, Kate Forbes, the courtesy of a phone call?”

Rishi Sunak said he welcomed the fact that Ms Thewlis  was pleased with the extension of job support through to next year.

He added: “With regards to Scotland, it is clear, as even the First Minister [Nicola Sturgeon] has conceded, that the generous support currently available in Scotland is only possible and affordable because we have a Treasury that represents the whole of the United Kingdom.

“I can, of course, confirm that the coronavirus job retention scheme is a UK-wide scheme. We will continue to apply the furlough to each part of the UK equally, treating every citizen, no matter which region of the nation they live in, the same.”

  • Labour’s response is in the previous item in this issue of The Democrat.

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