Sturgeon tells PM: Bring back furlough urgently to rescue businesses

16 December 2021, 19:15

Sturgeon has demanded the furlough scheme return
Sturgeon has demanded the furlough scheme return. Picture: Alamy
Gina Davidson

By Gina Davidson

Nicola Sturgeon has written to Boris Johnson demanding the urgent re-establishment of the furlough scheme in order to support businesses affected by public health restrictions enforced by the rapid spread of the Omicron variant.

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Scotland's First Minister also warned in Holyrood the Prime Minister and Chancellor must not "sleep walk into an emergency" caused by rising Covid cases.

At First Minister's Questions she revealed that she had sent a letter asking to speak to Mr Johnson "directly". A Cobra meeting yesterday between the UK government and devolved governments had been attended by Michael Gove and Simon Clarke, the chief secretary to the Treasury.

In her letter Ms Sturgeon said that the strong guidance to people to restrict their household mixing and which events they should attend has a "massive impact on business".

She added: "Even without further restrictions, if left unchecked, Omicron will deliver a significant economic shock that will see lack of staff and pressure on already stressed supply chains lead directly to business failure.

"Frankly if we do not get Omicron under control, we are sacrificing the economic recovery we all want to see. If the Treasury does not provide financial compensation and protection, this result becomes all but inevitable.

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"I am therefore appealing directly to you - and urgently - to re-establish UK-wide schemes for furlough or, alternatively, to establish a mechanism whereby the devolved administrations (subject of course to appropriate financial controls) can trigger such schemes, and to ensure we have access to the financial support needed to deploy these schemes."

In the letter, which was also sent to the First Ministers of Wales and Northern Ireland, she also said that she would be "grateful" to be able to "discuss this directly with you", and that she hoped for a phone call this afternoon.

During FMQs, she told MSPs she was "profoundly concerned by the scale and the immediacy of the challenge" that the new strain of the virus poses.

Omicron is likely to be the dominant strain of coronavirus in Scotland from tomorrow, she advised - with 5,951 new coronavirus cases reported on Wednesday, of which almost half (45.4%) were likely to be the new variant.

Earlier this week, the First Minister issued guidance to people to reduce their social interactions, calling for any meet-ups to be restricted to a maximum of three households.

Speaking at the start of First Minister's Questions, she said she was "acutely aware of and deeply concerned about the considerable impact" this could have on businesses.

To help them cope, she said the "scale of financial support" that was put in place earlier in the pandemic was needed once again.

But Ms Sturgeon told MSPs: "There are simply no mechanisms available to the devolved administrations to trigger the scale of finance needed to support such schemes.

"We need the UK Government to act urgently and in the same way some other countries are already doing."

She said the issue needs the "urgent engagement" of both the Prime Minister and his Chancellor, Rishi Sunak.

"We must not sleepwalk into an emergency that for both health and business will be much greater as a result of inaction than it will be if we act firmly and strongly now," she said.

Ms Sturgeon said: "Omicron is doubling every two to three days in Scotland. In parts of the UK the doubling time is currently less than two days. Lives again are at risk here, livelihoods are at risk, and the NHS is at risk."

With the virus "raging", she hit out at Mr Sunak for travelling to California on official business.

Ms Sturgeon said: "What businesses want, and what businesses need more than anything right now, is the Chancellor of the Exchequer at his desk putting the financial support schemes in place that will stop them going to the wall."

While the Scottish Government is providing £100m to help businesses in sectors such as hospitality, which are now struggling because of the new advice, the First Minister conceded this was "not enough".

She added this is "why we need the Chancellor and the Prime Minister to do their jobs and to get proper financial support in place for businesses as quickly as is possible".

Ms Sturgeon stated: "Omicron is spreading exceptionally fast, much faster than anything so far experienced in the pandemic.

"I am profoundly concerned by the scale and the immediacy of the challenge it poses."

The Scottish Government is already accelerating the booster vaccination campaign, with 59,437 jabs given on Thursday.

But Ms Sturgeon added: "We must understand Omicron is currently running faster than even the fastest rollout of vaccines."