End of furlough means jobs and livelihoods are under threat, warns MSP Maree Todd
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North MSP Maree Todd has warned that the end of the furlough scheme leaves the local hospitality sector facing an uncertain future, with "jobs and livelihoods under threat".
The UK government's Coronavirus Job Retention Scheme closed yesterday, having protected millions of jobs in response to the pandemic.
Ms Todd claimed that the ending of furlough "could not be more poorly timed", with food and energy costs rising, and with the £20 Universal Credit uplift being scrapped early this month.
“Instead of mitigating the impact of Brexit and Covid-19, the UK government is preparing to pull the rug from under the economy by bringing a premature end to the furlough scheme," said Ms Todd, the SNP MSP for Caithness, Sutherland and Ross.
"To add insult to injury, the Tories are set to increase taxes and cut Universal Credit by £1040 a year, plunging many families in my constituency into poverty.
“As we approach the end of the tourist season, I’m particularly concerned over what the loss of the scheme will mean for the hospitality industry in the far north. Undoubtedly the sector has been one of the most exposed to the impact of Covid-19 and now, at a time when they should be looking to recover, the Tories have dealt the industry an uncertain future, with jobs and livelihoods under threat.
“The local economy will too feel the impact of mass redundancies and losses of income.
“At a time when food costs are soaring and energy prices are on the rise, the end to the scheme could not be more poorly timed and will only leave the most vulnerable in society suffering.”
Trudy Morris, chief executive of Caithness Chamber of Commerce, said the organisation would be hosting business breakfasts with its members in the coming months to look at the question of business support.
“The furlough scheme has been vital in supporting businesses throughout the Covid-19 pandemic," Ms Morris said. "The move beyond level zero has removed most of the restrictions preventing businesses from operating as normal, and in many cases we are now looking towards economic recovery and regeneration, an area where support from both UK and Scottish governments is required.
"Businesses also need support to deal with some of the economic aftermath of the pandemic, including the supply chain issues which have been so prevalent in recent weeks.
“It is too early as yet to say what the full impacts of the end of the furlough scheme might be, and the chamber will be hosting a series of business breakfasts with our members over the coming months to more closely understand what support our members require as we look towards a post-Covid future."
She added: “With the Scottish Government continuing to push ahead with plans for vaccine passports, it is clear that the potential for further Covid-related business restrictions remains on the cards. Should either the UK or Scottish government introduce any legislation which restricts businesses from operating at full capacity, we need them to be ready to offer support on a level with the furlough scheme to address the impacts this would have.”
David Richardson, Highlands and Islands development manager at the Federation of Small Businesses, said it was now "uncharted territory" for many employers.
“Furlough has undoubtedly kept many Caithness businesses alive that would otherwise have closed, and in a highly diversified economy like this that really matters," Mr Richardson said.
“However, no-one knows what will happen next – we are in uncharted territory. Will employers who have continued to pay out to furlough staff in the hope of retaining them once it ends have their hopes realised, or will they be forced to release them? Time will tell.
“However, we all know that there is a serious shortage of skilled workers in some key industries and sectors. While we must fervently hope that no redundancies occur, if they do, then let’s hope that those affected find suitable and satisfactory employment elsewhere, and quickly. Caithness needs a boost in these difficult times.”
Jamie Stone, the Liberal Democrat MP for Caithness, Sutherland and Easter Ross, said: “The end of furlough, coinciding as it does with the Universal Credit cut and the upcoming hike to energy prices, threatens to leave Caithness residents jobless – stalling the north Highland economy just as we are beginning to recover.
"It is a deeply concerning situation. I would urge the UK government to look closely at the sectors where large swathes of employees are still unable to operate and provide targeted support to ensure we do not see mass job losses.”
Sadie Kevill, manager of Caithness Citizens Advice Bureau, warned this week that the ending of the furlough scheme "runs the risk of job losses across the county".
According to the UK government, the Coronavirus Job Retention Scheme has protected nearly 12 million jobs and supported more than 1.3 million businesses, with 910,000 jobs in Scotland safeguarded.
A UK government spokesperson said: "Furlough was the right thing to do at the height of the pandemic, when necessary health restrictions were in place – this way we were able to protect lives and livelihoods. As the economy reopened and businesses started to trade again it's right that employees can get back to work.
"The government is doubling down on its Plan for Jobs as the UK economy rebounds."