End of furlough scheme could mean 'serious challenges' for north firms, says business leader

BUSINESSES in the north could face "serious challenges" when the UK government's furlough scheme comes to an end next month.

That is the warning made by the chief executive of the Caithness Chamber of Commerce, Trudy Morris, who would like to see the continuation of the financial support "in the coming months".

She is concerned "the sudden loss" of the scheme, which has provided financial help for firms during the coronavirus crisis could create "a cliff-edge" for businesses across the north.

The funding package was announced by the Chancellor of the Exchequer, Rishi Sunak, when the UK went into lockdown in March. At that time, firms could claim 80 percent of the wages of furloughed staff – up to £2500 – although that figure was reduced to 70 per cent at the start of this month. Employers pay 10 per cent to ensure staff still receive 80 per cent of their wages. The scheme will finish at the end of October.

Ms Morris said: "The furlough scheme has brought significant relief to businesses over the lockdown period, and has helped to prevent significant job losses that would otherwise have been unavoidable. In recent months, with the added flexibility to bring employees back part-time or to bring them on and off furlough, it has been a key part of enabling businesses to get their operations back up and running. With physical distancing restrictions still in place, it remains difficult for many businesses to bring back all their staff at one time and the furlough scheme has also played a key role in enabling these businesses to continue to operate at a reduced capacity.

"While the past few weeks have shown some promising green shoots of recovery in the region, particularly for the hospitality and tourism sector, we are aware that many businesses will need continued support through the winter and into next year. A 'cliff edge' in terms of sudden loss of support through the furlough scheme could bring serious challenges to businesses across the north Highlands."

She added: "The support provided to businesses throughout the pandemic has been welcome and recognises the key role that business plays in our local communities. It is important that the good work done so far is not lost for want of a few months of additional assistance. As a chamber, we are continuing to lobby both Scottish and UK Governments on the importance of understanding the needs of businesses in the North Highlands and to continue to provide tailored support in the coming months."

Speaking earlier in the year, the chancellor said: "Our Coronavirus Job Retention Scheme has protected millions of jobs and businesses across the UK during the outbreak – and I’ve been clear that I want to avoid a cliff edge and get people back to work in a measured way."

Figures show the job retention scheme has protected 7.5 million workers and almost one million businesses.

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