Extension to furlough scheme would 'save 61,000 jobs' claim Scottish Government

The First Minister said her “natural optimism” made her hopeful the UK Government would extend the scheme.

An extension to the furlough scheme could save 61,000 jobs in Scotland, the Scottish Government has said.

Nicola Sturgeon said she is “hopeful” that the UK Government will extend the furlough scheme beyond October in the Scottish Government’s latest plea to extend the job-saving fund.

Speaking at her daily coronavirus briefing, the First Minister said her “natural optimism” created hope that the scheme would be extended, however the UK chancellor Rishi Sunak has given no indication plans for the scheme to end in October will change.

Ms Sturgeon’s comments came as the Scottish Government published its own analysis of the scale and the cost of the furlough scheme in Scotland.

It claims an extension to the scheme could save 61,000 jobs at a cost of £850m, scaling up to a “modest” £10bn if extended throughout the UK, the proposal sets out.

The paper also claims the scheme could “pay for itself” through wider economic benefits by avoiding a rise in unemployment in Scotland and supporting the continued recovery of the country’s GDP, which official statistics said shrunk by just under a fifth in the second quarter of 2020.

The First Minister said: "My hope comes from my natural optimism, even in these tough times I try to stay optimistic.

"I just look at this situation objectively and think if I was taking the decision and knew that this decision, if i didn’t change it, was going to lead to lots of avoidable redundancies, I wouldn’t take it, I would change that.

"The chancellor is an intelligent person who I am sure doesn’t want to see that happen either so that is what leads me to hope that we will see some shift in the UK Government’s position.”

Economy minister Fiona Hyslop added that she hoped the UK Government and Mr Sunak would listen to the Scottish Government and avoid impacting the worst-hit sectors of the economy even harder.

Scottish Government statistics state that around 15 per cent of the country’s workforce is still on furlough across two thirds of all businesses, with the arts sector and accommodation and food sector hardest hit with 57.5 per cent and 34.4 per cent of those sector’s workforce still on furlough.

Ms Hyslop said: “There have been some overnight indications that the UK Government may look at things but to date they’ve said that it will end at the end of October.

"But of course remember that’s what they also said immediately before the extension from June to October.

"It has to be evidence led, that’s why we published the paper we have today, but it is also something that is in active discussion.

"The UK have said they won’t change but we are hopeful that they will listen to the arguments, particularly from those sectors that we know will suffer longest in terms of the economy.

“Of course, the furlough scheme cannot continue indefinitely, but an extension would help keep people in jobs while sectors of the economy currently unable to fully open recover and will lead to sustained economic benefits at a relatively small cost.”

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