Furlough Scheme Changes Risks Putting Businesses to The Brink and Costing Jobs

The SNP has warned that restrictions in support for furloughed workers and self-employed people outlined by the Chancellor will push businesses to the brink, force people into further economic hardship, and could cost countless jobs across the UK.

The party’s Shadow Chancellor has urged Rishi Sunak to rethink the plans and instead fully extend the schemes to prevent firms taking on unmanageable debt or being unable to afford salaries which could lead to mass redundancies, and to continue to assist struggling self-employed workers.

The MP also renewed calls to ensure devolved nations will continue to have access to the schemes for as long as is required.

It follows confirmation from the Treasury that it will reduce its 80 percent salary contribution for workers in the coming months – forcing businesses to cover the gap despite economic difficulties caused by the coronavirus pandemic – and that it will end the Self-Employment Income Support Scheme (SEISS) with a second and final capped grant.

Research published by the Institute of Directors revealed that a quarter of employers using the furlough scheme would be unable to afford to make any contribution at all towards workers’ wages as the economic hit of the pandemic is felt.

Meanwhile, a cross-party letter – including SNP MPs – was issued to Mr Sunak calling for an extension to SEISS which has so far supported over 2 million self-employed workers.

Commenting, SNP Shadow Chancellor Alison Thewliss MP (pictured) said:

“The changes announced by the Chancellor to the Job Retention Scheme and Self-Employment Income Support Scheme risks pushing businesses to the brink, forcing self-employed people further into hardship, and could cost countless jobs across the UK.

“Rather than restricting financial support for those impacted by the coronavirus pandemic, the Chancellor must strengthen support and fully extend the schemes for as long as is necessary to ensure a strong economic recovery.

“Workers and employers must not be penalised due to the pandemic, and moves to reduce financial assistance to businesses could end up sending unemployment soaring as they are forced to make mass redundancies or take on unmanageable debt.

“I urge the UK government not to undo the work that has been done so far to help businesses and workers through these challenging times, and to instead listen to concerns raised by firms and industry organisations who are calling out for the strengthening and extension of support schemes.

“The Chancellor must also ensure that the devolved nations continue to have access to the furlough scheme for as long as is required to protect jobs and the economy, as well as clarifying what his plans on the furlough scheme will mean for sectors like tourism and hospitality, who were first out and will be last back.”