Furlough scheme in Scotland: will the UK-wide job support scheme be extended for Scottish businesses and workers?

The furlough scheme has been extended in England – but will the same happen in Scotland if there is another lockdown?

Nicola Sturgeon called for clarity from Westminster on whether the furlough scheme will be extended for Scotland (Shutterstock)
Nicola Sturgeon called for clarity from Westminster on whether the furlough scheme will be extended for Scotland (Shutterstock)

England enters a second lockdown this week and the UK Government’s lifeline furlough scheme has now been extended until March to support workers and businesses through the restrictions.

First Minister Nicola Sturgeon urged the chancellor to confirm that this same financial support would be available in the event that she places Scotland under lockdown after 2 December - the date on which the harsher measures are supposed to end south of the border.

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Rishi Sunak responded on Thursday by confirming that the Treasury will extend the full furlough scheme to Scotland and the other devolved nations if they decide to impose their own restrictions.

The Chancellor announced to the Commons, in a complete U-turn, that the furlough scheme paying 80% of employees’ wages will continue across the whole of the UK until the end of March.

What is the furlough scheme?

Employees across the whole of the UK were placed on furlough during the first nationwide lockdown to prevent mass redundancies.

The government paid 80% of employees’ wages, up to £2,500 a month, while businesses were forced to close and people were unable to go into work.

Some businesses paid the extra 20% of wages so their staff were receiving full pay.

As lockdown restrictions have eased, in recent months the government has reduced the financial support to 60% with firms topping up the extra 20%.

Around 10 million jobs have been claimed for through the furlough scheme, and an estimated two million people were still relying on it at the end of October.

By 18 October, furlough had cost the taxpayer £41.4 billion.

The scheme was due to end and be replaced by the chancellor’s Job Support Scheme on 1 November, after the government repeatedly resisted calls from unions, businesses and opposition MPs to extend it as other European countries, like Germany, have done.

However, a U-turn was made by Boris Johnson when he announced England’s second lockdown, and the furlough scheme was originally extended to cover the four-week period of national restrictions in England, while pubs, restaurants, gyms and non-essential shops close.

Rishi Sunak then made a further U-turn on 5 November by announcing the extension of the furlough scheme across the whole of the UK until the end of March next year..

Once again, the state will subsidise 80% of employees wages, until the scheme is reviewed in January “to decide if economic circumstances are improving enough to ask employers to contribute”.

Why was Nicola Sturgeon calling for the furlough scheme to be extended?

Regions in Scotland are currently placed under a five-tier system, with different areas facing varying levels of restrictions which reflect the number of cases and the growth rate of the virus.

But, in the case that Scotland needs to enter a full lockdown at any point, First Minister Nicola Sturgeon called for clarity from Westminster on whether the country will receive the same furlough extension as England.

She argued, along with the Welsh Government, that it’s not fair if the full financial support package is only available to devolved nations until 2 December, while England is in lockdown.

Will the furlough scheme be made available in Scotland?

Rishi Sunak has finally made it clear that the furlough scheme will be extended to Scotland in the event that Nicola Sturgeon decides to place the country under lockdown.

Thursday’s announcement means Treasury money will be made available until March to cover the wages of Scots workers, up to £2,500 a month, if their places of work are forced to close.

During his statement, Sunak said: “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 will remain the case until next March."

He added: “It is a demonstration of the strength of the Union and an undeniable truth of this crisis that have only been able to provide this level of economic support because we are a United Kingdom."

The Chancellor moved to clear up confusion which had arisen around the subject after Housing Secretary Robert Jenrick appeared to contradict Boris Johnson’s confirmation that furlough would be available in Scotland.

He said: "If other parts of the UK decide to go into measures that require the furlough scheme, then of course it is available to them. That has to be right. That applies not just now but of course in the future as well."

However, on Tuesday morning, Housing Secretary Robert Jenrick told Sky News that it was up to the chancellor to decide whether Scotland should receive financial support after England’s lockdown period ends.

Mr Jenrick said: "It will be available to everybody in the United Kingdom until 2 December.

"At that point, I think the chancellor quite rightly will have to decide what its future is."

He was then asked if the furlough scheme will be extended to Scotland beyond that date, to which he answered: “That’s a decision the chancellor will have to make.”

A spokesman for the Prime Minister then said on Tuesday that the UK Government would “of course” provide financial support to Scotland if the country goes into lockdown after the beginning of December.

The amount of support, and whether it would be the same as in England, was not specified.

Speaking at her press briefing the same day, Nicola Sturgeon said Boris Johnson had “appeared” to agree Scotland access to the furlough scheme beyond 2 December, but that she was waiting for confirmation from the Treasury that the support would be at the same 80% level.

She added: "There has been some doubt cast over this commitment by a cabinet member in a television interview this morning.

"But, we hope this commitment will hold and the payments will be available on the 2 December on the same terms as November.

"We should all have access to the same financial systems, Scotland, Northern Ireland, England, Wales.

"We should be on a level playing field and I hope we get to that in the next few days."

The First Minister is yet to respond to Rishi Sunak’s announcement.