Reaction: Business groups respond to news of furlough extension

News that Chancellor Rishi Sunak has extended the furlough scheme has been broadly welcomed by business groups, although there have been some calls for complementary action by the Scottish Government.

Sunak said the UK government's highest priority remains to protect jobs and livelihoods. Picture: House of Commons/PA Wire.
Sunak said the UK government's highest priority remains to protect jobs and livelihoods. Picture: House of Commons/PA Wire.

Mr Sunak told the Commons the jobs furlough scheme is to be extended until the end of March, also outlining support for the self-employed, saying the government’s highest priority remains "to protect jobs and livelihoods".

He had previously extended the scheme, which pays 80 per cent of wages up to £2,500 a month, throughout November from October due to the second national lockdown in England. It is now set to be reviewed in January.

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Among those commenting on the latest measures was Andrew McRae, Scotland policy chair at the Federation of Small Businesses. He said: “This is the right move from the Chancellor and should save Scottish jobs. While this announcement could have come earlier, business leaders now have a bit of much-needed certainty going into the winter.”

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Scotland will have access to furlough scheme for any future lockdown

Mr McRae was also among those proposing action to help, say, companies without dedicated premises – while he called for action from the Scottish Government, warning that a full-scale lockdown north of the Border must not become more likely because of the latest financial changes.

“The Scottish Government should also explore whether it can now top up the grant support available for firms that currently can’t trade or are hampered by current restrictions,” he said. “Ministers in Edinburgh have a duty to provide as much help as possible to every firm on the precipice.”

Also calling on the Scottish Government to take action was Liz Cameron, chief executive of the Scottish Chambers of Commerce, who said the news from Mr Sunak provided Scottish businesses with “a glimmer of hope”.

She said: “The Scottish Government should continue to follow an evidence-led approach and work in partnership with industry before applying additional, harsher economic restrictions. That also means expanding test and trace capability to which is a key enabler to keeping the economy open.”

Howard Archer, chief economic advisor to the EY Item Club, deemed the Chancellor’s decision to extend the furlough scheme and the self-employment grant to the end of March crucial support to the UK economy during heightened uncertainty.


But he also said many companies may nonetheless have already carried out or planned for redundancies. “The latest move may not prevent a significant rise in job losses over the next few months, although it should limit the overall increase,” he said.

Mr Archer also pointed out how the Chancellor’s extension to the furlough scheme followed on from the Bank of England announcing £150 billion of quantitative easing. “The timing of the announcements gives the impression that the Treasury and the Bank of England are co-ordinating their action to provide robust support for the economy,” he concluded.

Jeremy Thomson Cook, chief economist at Equals Money, praised the fact the 80 per cent, “full-fat furlough” ensures employees able to navigate the first lockdown can also make it through a tough winter.

And while the furlough scheme has so far cost about £5bn a month, Mr Thomson Cook said that now is not the time to discuss government spending and deficits, adding: “Spending too much money is not as big a risk as this pandemic is in the wider scheme of things."

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