The UK Government must extend the Covid-19 furlough scheme or risk “huge job losses” across Dumfries and Galloway, South Scotland MSP Colin Smyth has warned.
Recent furlough figures released by the UK Government show 15,400 people in Dumfries and Galloway had been furloughed as of 31 May, while 5,500 Self-Employment Income Support Scheme (SEISS) claims were made, totalling £16.5m.
SEISS uptake was just 64 per cent, the third lowest take up rate in Scotland and below the Scottish average of 70 per cent.
The Coronavirus Job Retention Scheme will close on 31 October 2020 and from 1 August 2020, the level of grant will be reduced each month.
The timetable for changes to the scheme is set out below:
· For June and July, the government will pay 80% of wages up to a cap of £2,500 for the hours the employee is on furlough. Employers will have to pay employees for the hours they work.
· For August, the government will pay 80% of wages up to a cap of £2,500 for the hours an employee is on furlough and employers will pay ER NICs and pension contributions for the hours the employee is on furlough.
· For September, the government will pay 70% of wages up to a cap of £2,187.50 for the hours the employee is on furlough. Employers will pay ER NICs and pension contributions and top up employees’ wages to ensure they receive 80% of their wages up to a cap of £2,500, for time they are furloughed.
· For October, the government will pay 60% of wages up to a cap of £1,875 for the hours the employee is on furlough. Employers will pay ER NICs and pension contributions and top up employees’ wages to ensure they receive 80% of their wages up to a cap of £2,500, for time they are furloughed.
Colin Smyth said: “These furlough figures show the scale of the economic tsunami which is about to hit our region.
“The Covid-19 pandemic is first and foremost a health crisis, but as I have said from the start, it is also a serious economic crisis too.
“Tens of thousands of people in our region are currently reliant on the furlough scheme and when it comes to a close at the end of October, we will see huge job losses. Over 15,000 people in Dumfries and Galloway are being paid through the furlough scheme because their jobs have been affected by the pandemic.
“Once this support is withdrawn, while some people will be able to go back to work, many employers are going to seriously struggle and will have little option other than to lay people off unless we see more Government support.
“Our region is heavily reliant on tourism and hospitality and it is these sectors which will take the longest to recover from the lockdown.
“I am urging the UK Government to extend the furlough scheme beyond the current end date of October or risk huge job losses. This is a very perilous time for our economy and the livelihoods of thousands of my constituents are on a knife edge. I want action now and I will continue to push for more support.”