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Treasury plans to cut furlough scheme to cost thousands of jobs in Scotland


By Kirsty Brown

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The UK government has come under renewed pressure to reverse its "dangerously premature" plans to cut furlough scheme support from this week, after new research revealed that more than half of surveyed Scottish firms will be forced to make job cuts by the end of this year as a result.

Research published by the Fraser of Allander Institute for Addleshaw Goddard Scottish Business Monitor found that 12 percent of firms will have to make significant cuts to staff numbers, while 43% stated that they would have to make redundancies.

The threat to jobs comes as the Treasury prepares for the first round of cuts to the Job Retention Scheme on August 1, with the scheme being shut down entirely on October 31 - which risks pushing people into hardship and abandoning firms who are struggling to stay afloat due to the economic crisis caused by the health pandemic.

The SNP has ramped up calls on the UK government to extend the income support schemes into 2021, introduce a financial package of at least £80bn to deliver an investment-led recovery, and to devolve financial powers to Holyrood so it can ensure a strong and tailored recovery to the crisis for Scotland.

Alison Thewliss
Alison Thewliss

Commenting SNP Shadow Chancellor Alison Thewliss MP said: “The decision by the Tory government to cut the furlough scheme in the middle of the global pandemic, and ahead of a potential second wave, is dangerously premature and poses a threat to thousands of jobs across Scotland and the UK.

“With the first round of cuts to the income support scheme due to begin this Saturday, businesses are already having to plan for the worst - with new research revealing that more than half of surveyed Scottish firms will be forced to axe jobs.

"This is on top of the businesses who have already outlined earlier that they will have to cut staff numbers due to the economic hit caused by the health crisis.

"Rather than abandoning firms and workers, the Treasury must heed the dire warnings and act before it's too late.

“Thousands of businesses are already on the brink and in need of strengthened support. It is critical that the UK government urgently reverses its plans and instead extends the furlough scheme into 2021 and fixes the gaps in support.

"It must also bring forward a serious financial package of at least £80bn to deliver an investment-led recovery, and devolve key financial powers to Holyrood so that we can secure a strong recovery for Scotland."


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