Home finance Boris Johnson under pressure to extend furlough payments to all of UK

Boris Johnson under pressure to extend furlough payments to all of UK

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Boris Johnson under pressure to extend furlough payments to all of UK


UK prime minister Boris Johnson on Tuesday faced growing pressure from the Scottish government and members of his own Conservative party to clarify how much support furloughed workers can expect if the devolved nations impose new coronavirus lockdowns.

The dispute highlights the frictions that can result from a UK devolution settlement that gives Scotland, Wales and Northern Ireland control of health policy but reserves to Westminster the fiscal powers needed to fund measures such as the furlough scheme.

When Mr Johnson announced a four-week lockdown for England on Saturday, he temporarily reinstated furlough payments at the original level of 80 per cent of wages for employees unable to work due to the measures.

But Mr Johnson and his ministers have been vague on whether the same will apply to other parts of the UK if they introduce lockdowns that run beyond December 2, or whether payments will be cut to 67 per cent, the level in the Job Support Scheme, that replaces furlough.

Nicola Sturgeon, Scotland’s first minister, told a daily coronavirus briefing on Tuesday that devolved governments needed to know what furlough payments would be available.

“We are pressing urgently for that clarity,” Ms Sturgeon said.

Refusing to extend furlough on the same terms would risk fuelling complaints in the devolved nations that Mr Johnson is prioritising English interests.

In the House of Commons, David Mundell, a Conservative former Scotland secretary in the UK government, called for clarity on future furlough plans, saying Ms Sturgeon’s Scottish National party was exploiting the confusion to create a “grievance” narrative.

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But Steve Barclay, Treasury chief secretary, was unable to say whether the furlough scheme would apply at the 80 per cent rate in Scotland and other devolved areas.

“Furlough has always been a UK-wide scheme. The government will always be there to provide support for all parts of the UK,” Mr Barclay said, without explaining what this meant in practice.

The Treasury is acutely aware of the complex situation: among the economic matters run from Westminster is the PAYE system for collecting income tax, which is central to how the furlough scheme is implemented.

Tensions between the health and economic needs of Holyrood were inevitable, UK government insiders suggested, noting that the varying levels of restrictions in the different nations of the UK would make different levels of furlough complex to introduce.

“We made the decision to extend furlough because of the health crisis and how things have changed over a short period of time,” one Treasury official said, adding with reference to England: “The economic response has gone from a local to a national approach in the course of a day.”

The insider added that UK chancellor Rishi Sunak had engaged with the first ministers in Scotland, Wales and Northern Ireland throughout.

The dispute could be damaging for Douglas Ross, leader of the Scottish Conservatives, who has been outspoken since the weekend about the need for furlough to be extended on the same terms for Scotland if it is needed.

Mr Ross declared victory on Monday when Mr Johnson assured him in the Commons that the furlough scheme would be available to other parts of the UK in the future.

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Mr Ross insisted that Mr Johnson’s response meant “Scottish jobs will receive the same backing as jobs in England”, but doubts were raised on Tuesday morning when UK communities secretary Robert Jenrick told Sky News that it would be a matter for the UK chancellor to decide.

Mark Drakeford, Wales’s first minister, has said it was “not fair at all” for the UK government to refuse repeated requests to make furlough payments at 80 per cent of wages during the current two-week “firebreak” lockdown imposed in Wales, only to reverse policy for the English lockdown.

Responding to Mr Jenrick’s comments, Mr Drakeford said on Twitter: “We take the PM at his word and would expect him to instruct any chancellor in a government led by him to do the same.”

Ms Sturgeon said the difference between receiving 80 per cent and 67 per cent of their usual income would make a huge difference for many workers.

“With the greatest of respect to Douglas — who has made his views clear on this and fair play to him for that — it is the Treasury that writes the cheques,” the first minister said. “Woolly words don’t pay anybody’s wages.”

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