Analysis: Furlough extension shows Covid pandemic still in control

It seems no coincidence that Chancellor Rishi Sunak's announcement of an extension of the UK Government's job support package came just days after the widespread package of fresh restrictions were set out for Scotland to combat the second wave of coronavirus.

Friday, 9th October 2020, 5:22 pm
Updated Friday, 9th October 2020, 5:54 pm
Rishi Sunak has set out fresh support package
Rishi Sunak has set out fresh support package

Nicola Sturgeon even warned today she "strongly suspected" the rest of the UK was poised to follow suite with similar restrictions as the pandemic shows little sign of abating and winter looms.

The initial Job Retention Scheme was an unprecedented intervention to prop up the British economy.

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Rishi Sunak unveils new furlough wage extension for businesses forced to close

At the height of the crisis, almost one third of Scotland's workforce - about 700,000 workers - were being supported with 80 per cent of their wages being paid by the Treasury.

Even now, more than 200,000 are still on the revised scheme, which is due to expire at the end of the month.

The Chancellor was perhaps thinking the need for such sweeping intervention, at the cost of billions, was winding down with the current furlough scheme due to finish at the end of this month and his Winter Economic plan published a fortnight ago.

But the UK Government has been facing mounting political pressure at Westminster and from the devolved administrations to extend furlough and safeguard the livelihoods of millions.

The second wave of the virus now seems to have settled it.

The kind of restrictions being imposed in Scotland for the next fortnight look inevitable south of the Border.

The Job Support Scheme should mean the cost of compensating bars and restaurants affected by closures north of the border will be covered by the UK Treasury, with the governments in Edinburgh, Wales and Northern Ireland to receive increased funding.

The priority now in Scotland is to ensure the £40 million package is deployed without delay to establishments forced to close.

It comes as the precarious state of the UK's economic recovery from the pandemic was revealed in figures showing growth increased by a disappointing 2.1 per cent in August and the economy remains more than 9 per cent smaller than before the pandemic struck.

A further shutdown will only see GDP take another nosedive. Today's package may be welcome respite for employers and staff, but grim news for any prospect of an escape from the grip this pandemic has on everyday life.

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