South Scotland SNP MSP Paul Wheelhouse has, on behalf of local businesses and their employees, called on the UK Government extend the Coronavirus Job Retention Scheme, known as the ‘furlough scheme’ into at least 2021 – after Germany indicated that it will look to extend its version of the scheme from its original duration, of 12 months, to 24 months.
The UK Tory Chancellor has already cut back on the Coronavirus Job Retention Scheme, with the furlough scheme set to end entirely on 31 October 2020, whereas Germany automatically, from the outset of the pandemic, already allowed its businesses to use its own Kurzarbeit part-time working scheme until March 2021, but has now extended it by a further 12 months.
With chains such as Boots, WH Smith and Royal Mail, who employ hundreds of staff across the South of Scotland, already announcing widescale job loses – even in advance of the ending of the scheme– Paul Wheelhouse has said that it is “very clearly premature” to end to the furlough scheme in the middle of a global pandemic, while there is no vaccine yet available and any surge in unemployment in October could would be ‘catastrophic’ to the Borders economy, where 13,000 people are known to have been furloughed since the scheme began.
Commenting, Mr Wheelhouse, who worked as a professional economist for 19 years prior to his election, said:
“In the past few weeks alone we’ve seen businesses such as Boots, WH Smith and Royal Mail announce very substantial job loses that could affect staff here in the Borders.
“In European countries like Germany, reports of an extension to their version of the furlough scheme will come as a welcome relief to millions of their workers and businesses who are worried about their future. I know of businesses that operate in both the UK and Germany where they have told me workers are being made redundant within their UK operations while their German offices are retaining staff, solely because of the better German scheme. Germany has got this right both in their scheme’s duration and flexibility – I have welcomed the action of the UK Chancellor in creating the UK’s scheme, but it remains less flexible and it is very clearly premature to end the JRS this early.
“It is indeed a matter of great concern that, despite calls from the Scottish Government and sectors such as tourism, oil and gas and aviation, the Conservative UK Government’s Chancellor at Westminster, Rishi Sunak, is choosing to prematurely shut down the UK’s furlough scheme; the loss of this support will cause absolute misery for thousands of workers in the Scottish Borders and tens of thousands across Scotland.
“The jobs and livelihoods of working families here in the Borders and across Scotland are on the line. It’s time for the UK Government to recognise that normal fiscal rules cannot be applied amid a crisis and this is demonstrated by progressive steps in countries such as Germany – the Tories must rethink their catastrophic plans to scrap the furlough scheme early and extend the measures into 2021 at least.
“If they don’t care, then the Tories should let the Scottish Parliament have the necessary powers so we can take the action we need to save Scottish jobs and avoid an economic calamity adding to the looming challenges of Brexit and the existing damage caused by the Coronavirus.”