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Coronavirus: Fresh call for clarity over future of furlough funding in Scotland

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Chancellor Rishi Sunak is being pressed to say whether he would help fund the continuation of the job retention scheme in Scotland if it remained in lockdown for longer than England.

The so-called “furlough” programme is paying 80% of the wages of more than a quarter of workers in the UK, and Mr Sunak confirmed on Tuesday that it would be extended until the end of October.

However, businesses are now due to be asked to pay a greater share of employee salaries from August onwards, leaving many seeking more details about the plans.

Prime Minister Boris Johnson has also begun easing lockdown arrangements quicker in England than in the rest of the UK.

Boris Johnson filming his address to the nation from 10 Downing Street.

The divergence has led to many fearing a constitutional clash if the Scottish Government has to ask the UK Treasury to help pay to keep staff off work for longer in Scotland than south of the border.

The current furlough programme is administered by HM Revenue and Customs and funded through the Treasury, and most experts agree that the Holyrood government does not possess sufficient borrowing powers to bankroll an extension itself.

Malcolm Cannon, national director at the Institute of Directors in Scotland, said: “Today’s extension of the furlough scheme will provide employers and workers across the country with some relief.

“We are pleased to see the calls for a flexible furlough from the IoD to the treasury have been heard.

“However, as exit plans may differ north and south of the border, it’s important that further clarity around this extension is provided should lockdown easing measures differ between Scotland and England.”

Chancellor Rishi Sunak outside 11 Downing Street, London, before heading to the Commons to deliver his Budget.

In the Commons, SNP MP Alison Thewliss quizzed Mr Sunak on whether he would commit to ensuring the scheme remained in place in devolved nations if required.

The chancellor responded: “This is now an extension for four months to the end of October, which it will provide eight months of support in total to all regions and all sectors of the United Kingdom.

“I think it provides a very good and generous runway for businesses and firms to plan against and indeed to start getting back to work when the time is right, as per the prime minister’s plan that was outlined on Sunday and Monday.”

Speaking afterwards, a Treasury source: “We’ve already provided five months’ worth of certainty today. If the question is, are we going to be staying in close touch with the devolved administrations going forward? Absolutely.”

Economy Secretary Fiona Hyslop.

SNP Economy Secretary Fiona Hyslop welcomed the extension of the scheme until October, and was “particularly pleased” about new flexibility from August to enable staff to return to work part-time.

But she added: “However, more clarity is required on the details of today’s announcement.

“In particular, what employers will be asked to contribute to the costs of the scheme, how any changes will relate to guidance on safer workplaces in each of the four nations, how workers in isolation will be supported and what additional support might be provided to industries, such as tourism and hospitality, facing specific difficulties.

“I will be raising these issues with the UK Government in the coming days.”