Chancellor’s economic plan 'does not go far enough', says Forbes

Scottish Finance Secretary Kate Forbes has said the Chancellor’s new economic plan “does not go far enough” to protect jobs and businesses.

Chancellor Rishi Sunak unveiled his replacement for the furlough scheme, with a plan to top up people’s wages for the next six months.

But Forbes said greater clarity and certainty was needed for businesses.

“Following our repeated calls for more action to protect jobs, I welcome some of what has been announced by the UK Government,” said Forbes.

“However, what the Chancellor has set out today does not go far enough. With only five weeks to go until the end of the furlough scheme, businesses have already taken difficult decisions and now need greater certainty and more time to plan.

“Our analysis suggested 61,000 jobs would be saved if the furlough scheme was extended, and it appears that from the detail this scheme will not provide the support that was hoped for.

“We also need more clarity on what this will mean for those businesses and people who are not working at present as over 217,000 people are still on furlough in Scotland.

“It is disappointing that these changes don’t take into account our current reality of local lockdowns, with no apparent flexibility to support local or national restrictions, or those sectors, like the events sector, that have not yet been able to reopen.”

The Chancellor also announced a “pay as you grow” scheme to help firms who took out bounce back loans more time to repay them, and the temporary VAT reduction from 20 per cent to five per cent will remain in place until 31 March 2021.

Forbes added: “News of the VAT deferral and extension to the VAT cut for hospitality and tourism are positive steps, however these are two of the sectors hit hardest by this pandemic, and today’s announcement doesn’t give enough support for those sectors.

“It’s also important to highlight that this is not a budget – devolved governments need clarity on funding so we can tailor our support to meet Scotland’s needs.

“As I have stressed before, we have responded to COVID-19 without the fiscal levers we require. Not only is the UK Government denying us the appropriate financial powers needed to fully respond to the pandemic, it has also removed any clarity about how much funding we will receive by deciding to scrap this autumn’s UK Budget.”

Sunak said the next stage of his economic plan was “nurturing the recovery by protecting jobs through the difficult winter months”.

He added: "Today's measures mark an important evolution in our approach. Our lives can no longer be put on hold. Since May we have taken steps to liberate our economy and society.

"We did these things because life means more than simply existing. We find meaning and hope through our friends and family, through our work and our community.

"People were not wrong for wanting that meaning, for striking towards normality, and nor was the government wrong to want this for them".