Hansard

The fundamental principle of the scheme is to guarantee every young person in Scotland the chance to get employment, education or training. I am not suggesting that that fund alone will cover all of that but, clearly, that is the role that it will play. That is the nature of the guarantee.

We need the UK Government to continue its support too. We have seen a number of other countries realise that such support, through equivalent schemes, will need to continue in the medium to longer term. France and Germany are extending their equivalents to the furlough scheme. Ireland and Denmark, which are of similar size to Scotland, have both extended their support schemes, too. Those countries have realised that it is only through on-going help and support that they can assist their economies, protect jobs and promote business survival.

Why can the Chancellor of the Exchequer not do the same? Let me be clear. Were Scotland, which is of similar size to Ireland and Denmark, an independent country, that is what we would be doing right now. Yet, according to the chancellor, that is not the right approach for workers and employers here. In a recent letter to the Cabinet Secretary for Economy, Fair Work and Culture, he stated:

“Leaving the furlough scheme open forever gives people false hope that it will always be possible to return to the jobs they had before.”

We are not asking for the furlough scheme to be continued for ever. However, it was introduced in the first place because restrictions on normal economic activity had to be put in place to save lives.

The progress that we have made in tackling Covid-19—as fragile as that may be—has already meant that businesses in many sectors that faced restrictions at the start of the crisis are now able to open safely. However, some restrictions remain, and they are essential if we are to contain the spread of the virus. Ending the furlough scheme prematurely, before we are able to lift those restrictions, will cause unnecessary and widespread disruption. People who are doing the right thing now, by staying home and keeping their businesses closed, should not be abandoned while they still need support. Although in some sectors a significant number of people have already gone back to work, we should recognise that the research that we published yesterday indicates that around two thirds of businesses overall might have at least one person on furlough.

In the chancellor’s summer economic update, he announced the job retention bonus scheme. It is a one-off payment scheme to employers of £1,000 for every employee who was previously claimed for under furlough who remains in continuous employment through to 31 January 2021. We are concerned that it does not target support at the employers and workers who are most likely to need it. The bonus scheme will cost around £9.4 billion if all employers UK-wide take it up. However, a temporary extension of the furlough scheme is estimated to cost around £10 billion. The bonus scheme is untargeted, which means that firms could be paid for retaining jobs that were never at risk. Extending the furlough scheme could be more effective at saving jobs that are at risk in the short term, and it could be a better utilisation of public funds.

It is not just the Scottish Government that is of the view that the job retention scheme should be extended. Many others have made similar calls for the UK Government to change its approach. The general secretary of the Scottish Trades Union Congress has said that the UK Government must ensure that the scheme continues past October, and the general secretary of Unite has called for the same. Our business organisations, which I speak to and engage with regularly, are expressing their concern about a premature end to the furlough scheme.

We will take all possible action to support the economy. As outlined in our programme for government, that includes a range of measures to protect key sectors that are badly affected by the pandemic, but employers and workers in Scotland continue to need wider support that can currently be offered only by the UK Government. It has done that, correctly, through using borrowing powers that the Scottish Government does not have. It has delivered its schemes, again correctly, through Her Majesty’s Revenue and Customs, which the Scottish Government has no responsibility for.

We need to be able to respond to the continuing public health challenge of Covid-19. As we have seen in Scotland, other parts of the UK, and indeed globally, that will sometimes mean reintroducing restrictions to help contain the virus to save lives. The furlough scheme has been the foundation of the support available to businesses and workers to help them to comply with public health requirements. It has been a welcome contribution in responding to Covid-19, but the pandemic is not going to disappear at the end of next month, and neither is the economic impact. Ending the furlough scheme prematurely would not be a welcome contribution to responding to Covid-19. The UK Government’s insistence that the scheme should end on 31 October, with no indication of a replacement, is out of step with the decisions that many other countries are taking, out of step with the views of many here in Scotland and across the UK, and out of step with the needs of employers and workers the length and breadth of the country.

The UK Government must extend the furlough scheme, and this evening at decision time the Scottish Parliament must make its voice heard in calling for that.

I move,

That the Parliament believes that the UK Government’s furlough scheme should be extended to provide support and certainty to employers and workers in Scotland for as long as public health restrictions are required to control the spread of COVID-19, recognising that there are specific sectors that will be affected for a longer period.