Meeting date: Thursday, September 17, 2020
Meeting of the Parliament (Hybrid) 17 September 2020
Agenda: First Minister’s Question Time, Scottish Parliamentary Corporate Body Question Time, Portfolio Question Time, Employment Support, Parliamentary Bureau Motion, Decision Time
- First Minister’s Question Time
- Scottish Parliamentary Corporate Body Question Time
- Portfolio Question Time
- Employment Support
- Parliamentary Bureau Motion
- Decision Time
The next item of business is a debate on S5M-22731, in the name of Jamie Hepburn, on employment support. I invite members who wish to speak in the debate to press their request-to-speak-buttons.15:25
Back in April, the Scottish Government welcomed the introduction of the United Kingdom’s job retention scheme. The furlough scheme has maintained the viability of businesses and protected jobs in what has been a period unlike anything that we have experienced in our lifetimes.
As the economy opens gradually and safely, some have been able to return to their jobs, but the job retention scheme continues to support many. Although we welcome measures that have been taken by the UK Government, UK ministers should follow the lead of other European countries by extending the job retention scheme. Ending the furlough scheme prematurely runs the risk of pushing many businesses and employees into crisis.
Will the member take an intervention?
If Murdo Fraser can explain why that is a sensible thing to do, I will happily give way.
I am grateful to the minister for giving way so early in his speech. At this early stage, I wanted him to set out on the record that the UK furlough scheme has been among the most generous in the world.
I am happy to concede that the UK furlough scheme has been an excellent initiative. That might be why I am here urging the UK Government to extend such a sensible scheme. I look forward to the member supporting that at decision time.
Just yesterday, the Scottish Government published new analysis on Scottish firms’ use of the furlough scheme. It shows that, over the piece, nearly 100,000 people in Scotland have been supported by that scheme, that an estimated 15 per cent of Scotland’s workforce are still on furlough and that, of all firms that were surveyed, two thirds were still furloughing their employees to some extent.
As highlighted by the Scottish Government’s chief economic adviser in his report, extending the job retention scheme for even just eight months could reduce unemployment in Scotland by 61,000 through the first half of next year. Although only a temporary measure, that would have a positive impact on the labour market, preventing unnecessarily higher levels of unemployment over the next few years. Many businesses have a viable long-term future, but only if they continue to be supported. Keeping people in jobs rather than transferring the cost to the state through the social security system makes sense. Sustaining businesses to reduce economic decline, which jeopardises other businesses and jobs, makes sense. Without longer-term support, there is a risk that firms will fall off the cliff edge and that many people who otherwise might not have, will fall out of the labour market. That does not make sense.
I support the motion and the minister’s contribution so far. Back in June, the Parliament agreed to set out in financial terms the total sum of what the benefit would be, or has been, of the furlough scheme to Scotland. Has the minister been able to calculate that and can he tell us what that figure is? What is the financial benefit to Scotland?
Just yesterday, as I have alluded to, the chief economic adviser published a full assessment of the benefits of the introduction of the furlough scheme. I refer Mr Rennie to that report, so that he can see the assessment in more detail.
Will the minister gave way?
I am afraid not, Mr Rennie. I am happy to give way in closing.
In calling for the UK Government to extend the furlough scheme, I recognise the role that this Government must play in supporting businesses and workers in Scotland. We have taken that role seriously and continue to do so. That is why we moved quickly at the outset of this crisis to put a package of support in place that is worth more than £2.3 billion for Scotland’s businesses. That support has been essential for Scotland’s business community and we have looked to bridge gaps in support wherever we can.
The support has included £34 million for the newly self-employed hardship fund, to provide help for those who entered self-employment after April 2019 and were not covered by UK Government support, and it has included £30 million for the creative, tourism and hospitality enterprises hardship fund. In August, the First Minister announced £59 million in support for our important creative industries sector. We will be also be supporting our recovery with a £100 million green jobs fund, our £60 million youth guarantee, our £25 million transition training fund and other interventions as we move forward.
How many young people will the £60 million youth guarantee scheme provide for?
The fundamental principle of the scheme is to guarantee every young person in Scotland the chance to get employment, education or training. I am not suggesting that that fund alone will cover all of that but, clearly, that is the role that it will play. That is the nature of the guarantee.
We need the UK Government to continue its support too. We have seen a number of other countries realise that such support, through equivalent schemes, will need to continue in the medium to longer term. France and Germany are extending their equivalents to the furlough scheme. Ireland and Denmark, which are of similar size to Scotland, have both extended their support schemes, too. Those countries have realised that it is only through on-going help and support that they can assist their economies, protect jobs and promote business survival.
Why can the Chancellor of the Exchequer not do the same? Let me be clear. Were Scotland, which is of similar size to Ireland and Denmark, an independent country, that is what we would be doing right now. Yet, according to the chancellor, that is not the right approach for workers and employers here. In a recent letter to the Cabinet Secretary for Economy, Fair Work and Culture, he stated:
“Leaving the furlough scheme open forever gives people false hope that it will always be possible to return to the jobs they had before.”
We are not asking for the furlough scheme to be continued for ever. However, it was introduced in the first place because restrictions on normal economic activity had to be put in place to save lives.
The progress that we have made in tackling Covid-19—as fragile as that may be—has already meant that businesses in many sectors that faced restrictions at the start of the crisis are now able to open safely. However, some restrictions remain, and they are essential if we are to contain the spread of the virus. Ending the furlough scheme prematurely, before we are able to lift those restrictions, will cause unnecessary and widespread disruption. People who are doing the right thing now, by staying home and keeping their businesses closed, should not be abandoned while they still need support. Although in some sectors a significant number of people have already gone back to work, we should recognise that the research that we published yesterday indicates that around two thirds of businesses overall might have at least one person on furlough.
In the chancellor’s summer economic update, he announced the job retention bonus scheme. It is a one-off payment scheme to employers of £1,000 for every employee who was previously claimed for under furlough who remains in continuous employment through to 31 January 2021. We are concerned that it does not target support at the employers and workers who are most likely to need it. The bonus scheme will cost around £9.4 billion if all employers UK-wide take it up. However, a temporary extension of the furlough scheme is estimated to cost around £10 billion. The bonus scheme is untargeted, which means that firms could be paid for retaining jobs that were never at risk. Extending the furlough scheme could be more effective at saving jobs that are at risk in the short term, and it could be a better utilisation of public funds.
It is not just the Scottish Government that is of the view that the job retention scheme should be extended. Many others have made similar calls for the UK Government to change its approach. The general secretary of the Scottish Trades Union Congress has said that the UK Government must ensure that the scheme continues past October, and the general secretary of Unite has called for the same. Our business organisations, which I speak to and engage with regularly, are expressing their concern about a premature end to the furlough scheme.
We will take all possible action to support the economy. As outlined in our programme for government, that includes a range of measures to protect key sectors that are badly affected by the pandemic, but employers and workers in Scotland continue to need wider support that can currently be offered only by the UK Government. It has done that, correctly, through using borrowing powers that the Scottish Government does not have. It has delivered its schemes, again correctly, through Her Majesty’s Revenue and Customs, which the Scottish Government has no responsibility for.
We need to be able to respond to the continuing public health challenge of Covid-19. As we have seen in Scotland, other parts of the UK, and indeed globally, that will sometimes mean reintroducing restrictions to help contain the virus to save lives. The furlough scheme has been the foundation of the support available to businesses and workers to help them to comply with public health requirements. It has been a welcome contribution in responding to Covid-19, but the pandemic is not going to disappear at the end of next month, and neither is the economic impact. Ending the furlough scheme prematurely would not be a welcome contribution to responding to Covid-19. The UK Government’s insistence that the scheme should end on 31 October, with no indication of a replacement, is out of step with the decisions that many other countries are taking, out of step with the views of many here in Scotland and across the UK, and out of step with the needs of employers and workers the length and breadth of the country.
The UK Government must extend the furlough scheme, and this evening at decision time the Scottish Parliament must make its voice heard in calling for that.
That the Parliament believes that the UK Government’s furlough scheme should be extended to provide support and certainty to employers and workers in Scotland for as long as public health restrictions are required to control the spread of COVID-19, recognising that there are specific sectors that will be affected for a longer period.15:37
No one should be under the illusion that we face anything less than a full-blown jobs crisis. The latest figures show that Scotland now has the highest unemployment rate anywhere in the UK. The rate here is 4.6 per cent—in England it is 4.1 per cent, in Wales it is 3.1 per cent and in Northern Ireland it is 2.9 per cent. Those are not just numbers. Real people are facing redundancy across Scotland—at Rolls-Royce, in the oil and gas sector, at our major city airports and on high streets up and down the country.
Every effort must be made to save jobs and get people back to work. I welcome Labour’s amendment, which is a positive addition to the debate, and I look forward to hearing more from Labour members as well as from other contributors.
The Scottish Government has made some welcome proposals to aid our economic recovery—for example, the Logan report on digital skills and infrastructure, “Scottish Technology Ecosystem Review”, which contains recommendations for immediate action and long-term strategic change. That long-term change will be needed to build resilience and opportunity in the employment market in order to mitigate a future crisis.
The same can be said of Benny Higgins’s report, “Towards a Robust, Resilient Wellbeing Economy for Scotland: Report of the Advisory Group on Economic Recovery”, which is focused on saving jobs and reducing inequality. The former is obviously of immediate concern, but tackling inequality is especially important over the long term, and will be crucial to building the resilience that I spoke of, and to ensuring equality of opportunity for all in respect of employment.
The Higgins report is also right to highlight the need to focus on the opportunities that are available to young people, because young people are bearing the brunt of job losses—not least, because many work in hard-hit sectors including hospitality, in which the pub trade alone could see as many as 12,500 jobs go. I therefore welcome the youth guarantee, as outlined in Sandy Begbie’s initial report, to help to ensure that young people are given targeted support. That support should be particularly tailored to smaller firms, given the fact that they, as the Federation of Small Businesses advises, account for 99.3 per cent of all private sector businesses. It would also be helpful if the various employment support schemes were better co-ordinated.
To aid the youth guarantee further, and in order to help as many young people as possible, it is vital that it complements the Chancellor of the Exchequer’s new £2 billion kick-start scheme for 16 to 24-year-olds who are most at risk of long-term unemployment. I was pleased to see that Sandy Begbie recommends that approach. I urge ministers to get behind the kick-start scheme, just as they got behind the chancellor’s coronavirus job retention scheme, which the Scottish National Party admitted is one of the best in the world. The Cabinet Secretary for Economy, Fair Work and Culture went as far as to say that the furlough scheme is a “lifeline”.
I thank Maurice Golden for taking an intervention. I have just one point to make. Last week, in a debate in the House of Commons, the Chief Secretary to the Treasury, Steve Barclay, said:
“It is in no one’s long-term interests for the scheme to continue, least of all those trapped in a job that only exists because of the furlough scheme.”—[Official Report, House of Commons, 9 September 2020; Vol 679, c 634.]
Does Maurice Golden agree with that? If so, does he have anything to say to those who are trapped in sectors that are yet to reopen?
I thank George Adam for that intervention.
If we listen to the SNP, the Scottish Government paper “COVID-19: Analysis of Extending the Coronavirus Job Retention Scheme” said that
“the furlough scheme cannot continue indefinitely”.
The SNP has also admitted, as I said, that the scheme is among the best in the world but there is a balance to be struck.
Will the member give way?
I am developing the theme. Spending more increases debt, potentially decreases the credit rating of the UK, will increase the cost of borrowing and risk stagflation. However, we need to stop long-term scarring, and that is why I have consistently argued for sector-specific packages, as George Adam mentioned in his intervention. I am happy to give way.
Maurice Golden recognises that we are not calling for the scheme to be extended for time without end, but are asking for a sensible extension to support people through a difficult time. Will he acknowledge that a short eight-month extension has the potential to save 61,000 jobs in Scotland over the first half of next year? Surely that is something that we should get behind.
The minister should understand the wider economic impact and—as I have mentioned—with regard to increasing borrowing, the risk to the overall deficit. Those are the issues that the chancellor will be considering.
Several members rose.
I am going to make progress.
I also respect the minister’s and the cabinet secretary’s views on the furlough scheme. If they had listened to SNP back benchers, who booed the scheme when I last mentioned it in the chamber, they would have put party politics ahead of welcoming almost a million Scottish jobs being saved.
However, the furlough scheme must end at some point, as the SNP has admitted. Even once it draws to a close, that is not the end of the story, because the job retention bonus will pay £1,000 for every furloughed employee who is kept on. The furlough scheme is just one part of the massive £16 billion support that the UK Government has deployed in Scotland.
Will the member take an intervention?
I take it that I do not have extra time, Presiding Officer.
I will give you extra time for interventions
I thank Maurice Golden for giving way. Does he agree with the Resolution Foundation, which has said that the job retention bonus
“will not make a major difference to employment levels”
and cites the “significant deadweight” that the minister referred to? If he does not agree with the Resolution Foundation on that point, can he explain why?
Keith Brown, who during his tenure as minister presided over a disastrous economic strategy for Scotland, has a hard neck to try to lecture me on economics.
I will outline other measures that are complementary to the job retention bonus. For example, 63,000 Scottish businesses have benefited from a bounce back loan from the UK Government. In total, the loans are worth £1.8 billion.
Several members rose.
Do you wish to give way, Mr Golden?
No, I am going to make progress.
More than 2,600 firms have received support worth almost £600 million from the coronavirus business interruption loan scheme. VAT has been slashed to just 5 per cent to help our hospitality industry, and hospitality businesses and families got another boost with the eat out to help out scheme, which has served up more than 8,500 half-price meals in Scotland. That is all direct help from the UK Government to protect businesses and save jobs.
Of course, the story does not end there, and the UK Government must look at further measures to support specific sectors. However, we must also address the deep-seated problems in the Scottish economy—problems that existed before Covid. In August, the number of people starting new jobs dropped to its lowest rate since February, but even before the crisis, Scotland’s jobs growth rate was the worst in the UK. Since the SNP took power, the number of Scots in work has increased only by 4.6 per cent, compared with 10.2 per cent for the UK as a whole. In effect, SNP policies have cost Scotland more than 250,000 jobs.
In contrast, the Scottish Conservatives have set out a range of practical measures to save jobs, get the economy moving and build resilience against future shocks. They include: job security councils to match skills with vacancies to mitigate further unemployment; a hardship fund for businesses that are forced to re-close because of local lockdowns; a town centre adaptation fund to improve active travel and make other health and safety changes; a Scotland-first procurement plan that would favour local suppliers; the creation of a joint UK and Scotland infrastructure investment vehicle to allow joint funding of national-level projects; use of the city deals model to help our smaller towns and rural areas; and much more besides.
Those policies are ready to help people now—if the Scottish Government is willing to listen and to put protecting jobs and saving the economy ahead of constitutional arguments. If it can rise to that, the Scottish Conservatives stand ready to help.
I move amendment S5M-22731.2, to leave out from “believes” to end and insert:
“welcomes the protection of more than 900,000 jobs in Scotland as part of the UK Government’s Job Retention and Self-Employment Income Support schemes; notes that the Chancellor’s scheme has already ensured that more than 50% of those furloughed since May 2020 had returned to work by August; welcomes that, at the height of the pandemic, more than a third of Scotland’s workforce was furloughed as part of the Job Retention Scheme; further welcomes the UK Government’s Job Retention Bonus that will pay £1,000 to employers for every employee that is retained; recognises that continuing interventions will be necessary from the UK Government, and calls on the Scottish Government to protect Scottish jobs now by setting out specific support for businesses and sectors most affected by COVID-19, particularly given the guaranteed additional £6.5 billion from the UK Government.”15:47
I welcome the opportunity to discuss the support that is needed to help employers retain jobs across the UK and, where that is not possible, to help people who find themselves unemployed to get a job. The figures are stark—on a scale hitherto unseen—and will worsen substantially when the job retention scheme comes to an end in October.
Without the option of furlough, millions of workers across the UK would have found themselves immediately unemployed with no income and no idea of when, or if, they would be able to find work again. That includes more than 800,000 workers in Scotland who are on the furlough scheme. Estimates suggest that, when furlough unwinds, as many as 350,000 people in Scotland could find themselves out of work.
According to the Institute for Public Policy Research, 34 per cent of young people will lose their jobs when furlough ends—that is 100,000 young people. That will be the highest level of youth unemployment ever seen in this country. That is truly catastrophic. We need radical action if we are not to condemn a generation of young people to the dole queue. Anything that we do must be about providing real hope and opportunity—and we have to do that quickly; we cannot afford to wait.
The past few weeks have shown that the virus is far from over, which in turn means that the problems that Covid-19 has created for business and industry are not over either. It therefore makes almost no sense to end the job retention scheme next month. Employers need continuing support.
We need the job retention scheme to continue in some form. I have argued before for sector-specific deals, which means support for those industries that have been worst hit by the pandemic and where there is no certainty for their employees. That support must be tailored to the needs, strengths and weaknesses of the Scottish economy.
Our economy has a greater reliance on sectors such as tourism and hospitality, aviation—as we debated yesterday—and oil and gas than economies elsewhere in the UK. A sector-specific approach would be a sensible one to take. Equally, I want both Governments to invest in growing particular sectors such as the financial services and information technology sectors, to drive forward increased employment opportunities. Waiting until businesses fail is not an option, and we should be working with the Confederation of British Industry Scotland, the Scottish Chambers of Commerce, the Federation of Small Businesses and others to identify those areas at risk and invest. Let us have interventions that address the issues that are being faced by those in work who might be made redundant, in order to prevent job losses.
We also need to focus quickly on implementing the Scottish Government’s proposals to tackle the widespread unemployment that we are already experiencing. This is without doubt the biggest economic issue of our times and we cannot afford to sit around and wait for the UK Government to act. The situation requires the Scottish and UK Governments to work together.
I fully support the Alliance for Full Employment that Gordon Brown has initiated with the Welsh Government and metro mayors of cities and regions across England. It is hugely important to come together and act together on the employment crisis, mobilising all the resources across the UK to end the recession and create good-quality jobs. The AFE is a great initiative—it is exactly what is needed. Will the Scottish Government join in? Will it co-operate with others across the UK to focus on jobs? I will be happy to take an intervention from the minister if he wants to tell us. Yes or no?
If people approach us and let us know about things, we might consider co-operating with them.
I look forward—
You should really let me call you back in, Ms Baillie, but there you are.
Thank you, Presiding Officer. I look forward to the minister positively signing up, then, because we need to work together. Our young people need us to work together, as do those who are facing unemployment.
The UK Government’s attempt to tackle youth unemployment is the kickstart scheme for 16 to 24-year-olds. It is welcome, but it is simply not enough. It will assist only 250,000 of the 3.5 million under-25s who are not in full-time education, and then only for six months.
I am interested to know what the Scottish Government’s job guarantee will deliver. It is aimed at young people, and the Cabinet Secretary for Economy, Fair Work and Culture announced £60 million for the remainder of the current financial year. I understand that the source of the money is UK Barnett consequentials. That is welcome. The cabinet secretary’s press release talks about providing paid employment, education, an apprenticeship, training or volunteering. I agree with all that, but it is light on detail. How many young people will be covered, and over what period?
The minister said that it is a guarantee, but the numbers do not stack up. Given the expectation that an extra 100,000 young people in Scotland will be out of work as a result of the furlough scheme ending, does the minister consider that £60 million will be enough? It works out at £600 a head, which will not get us very far at all; it does not represent the scale of intervention that is required. That is all the more reason for Scotland to join the Alliance for Full Employment in order to maximise the funding that we can put towards tackling youth unemployment. It is one thing to make a guarantee, but we need it to be delivered, and the Scottish Government has not provided resources on the scale that is required.
I do not want to strike a note of discord, as we will support Ms Baillie’s amendment, and I hope that we will vote the same way, but I think that her comment might reflect some of the problems in her party. Her party leader has met Sandy Begbie, who is progressing the job guarantee. I do not know whether she does this often, but I urge her to speak to her party leader—I know that she is the deputy leader—and have a chinwag about it so that she understands what the job guarantee is all about.
I speak to my leader all the time, but I say to the minister that he is providing £60 million for 100,000 young people who are about to become unemployed. That is not enough; it is not the scale of the ambition that this country and our young people require.
In summary, I want the furlough scheme to be extended—of course I do—but I also want the Scottish Government to do three things. First, I want it to work with the Welsh Government and the regions and cities across the UK in the Alliance for Full Employment. Secondly, I want the scale of the Scottish Government’s response to be sufficient to meet the scale of the challenge that we face. It needs to set out how many young people will be helped, when, and the cost of that. Thirdly, there is huge urgency, but we have not seen the detail yet. How will young people apply? When will the scheme be open? Who will deliver on the ground? Will it be councils, Skills Development Scotland or private training providers? I hope that it will be all of them. When will we know the detail? Young people are unemployed now and many more will follow.
We are in a crisis that is about to get a whole lot worse. It is politically easy to blame the UK Government, but it is harder for the Scottish Government to do something itself. However, if we do not act quickly and at scale, we will let down a whole generation of young people.
I move amendment S5M-22731.1, to insert at end:
“; calls on the Scottish Government to act quickly to put in place a range of measures to support employment that are coherent and targeted at businesses at risk and those who find themselves out of work, in particular young people, women, disabled people and ethnic minorities; recognises the existing fragility and inequality in Scotland’s labour market, and calls on the Scottish Government to produce an industrial strategy that lays out increased investment in housebuilding, green energy and transport, to put Scotland back on track and ensure fairer, greener and sustainable jobs for all.”15:55
From our social security system to our national health service, and from social housing to social care, one of my core political beliefs is that Government should be there for people when they need help. The job retention scheme was established in unprecedented circumstances, when more than 10 million people were facing immediate and unexpected unemployment. The UK Government was absolutely right to introduce the scheme.
Of course, these unprecedented circumstances are still with us, and the UK Government’s decision not to extend the scheme ignores the fact that so many parts of our economy are simply not back up and running. Many people in many companies in many sectors require support for a longer period. The Conservative amendment ignores that, too, and Greens will not support it. How does the chancellor expect businesses to survive without support when they cannot do business now because of continued restrictions?
As an MSP for the Lothian region, I represent tens of thousands of people who are employed in tourism, events and other sectors that have been extremely hard hit by restrictions. Among them are the managers and employees of Carnival Chaos, an event production company in Leith. It has been successfully providing sets and props for events for more than 20 years. However, due to understandable restrictions on holding large events, it has not been able to provide its services since March. Of course, the rule of six, which was introduced for the most necessary of public health reasons, means that there will not be any events for the company to support in the foreseeable future.
If that business plays its part in helping to suppress the virus, we need to help it to be able to play its part in the recovery. Carnival Chaos and hundreds of other businesses in Lothian are successful and have good track records. They can have a bright future, but they will struggle over the medium term, because events entirely outwith their control have disrupted their trade. Cutting a vital lifeline, at a time when restrictions are being reimposed, and making life even harder for them will condemn many viable businesses to failure and put employees out of work.
Of course, that is avoidable. The job retention scheme obviously comes at a cost—around £37.5 billion across the UK so far. However, that figure pales in comparison with the £137 billion bailout of the irresponsible banks that caused the previous economic crisis, and the more than £202 billion that the Campaign for Nuclear Disarmament estimates it would cost to renew the UK’s dangerous and useless nuclear weapons programme.
The Scottish Government estimates the cost of extending the scheme for another eight months in Scotland to be around £850 million. The minister pointed out that that could save 61,000 jobs over those months, and a number of analyses have projected that that would make a significant difference to unemployment.
Like many colleagues across the chamber, I left school in the 1980s—a time when unemployment was consistently above 3 million. Many of us have experienced unemployment. We have experienced the suffering of friends and family who were made unemployed for reasons outside their control and who struggled to find work for a long period. We cannot go back to that.
The Scottish Government’s analysis of the impact on unemployment of an eight-month extension of the scheme is that it would reduce the unemployment rate in Scotland by 2.5 per cent in the last quarter of this year. Even as far ahead as 2023, unemployment in Scotland would be a whole 2 per cent lower. Of course, as well as being a personal tragedy, long-term unemployment is costly not just in terms of unemployment benefits, but in terms of health, wellbeing, self-confidence and self-esteem. I think that a colleague noted that the respected National Institute for Economic and Social Research concluded that, if the furlough scheme had been extended beyond the end of October, it would have been
“a relatively inexpensive measure, and by preventing a rise in long-term unemployment might have paid for itself.”
If we had had a universal basic income scheme already in place before the pandemic started, people would have had an established safety net—a safety net that might now have enabled them to build new livelihoods or take up new courses of study.
I want to point out that some of the most vulnerable people in our society are suffering badly at the moment. I have constituents who work in the Camphill community of Tiphereth and the Garvald centre. Those organisations create invaluable work opportunities for some of our most vulnerable citizens, including people with learning disabilities and who face other challenges. I am concerned about the impact that the pandemic is having on them, and I would be grateful if the minister could say, when concluding, what support the Scottish Government can provide to them.
It is also that important that employment support is made available to people who are helping to suppress the virus.
I have given you a little extra time. Please conclude shortly. Mr Rennie, I will give you that extra minute back. You have taken an extra minute Ms Johnstone.
I will conclude. Those who are self-isolating should have access to pay that is similar to sick pay, as should those who are on precarious or zero-hours contracts.
You must stop, in fairness to other members who keep to their time. It is all right Mr Rennie, I am going to give you five minutes.16:00
Five minutes? Good; that is excellent. I can fill that.
From my discussions with constituents, I know that many are hurting and that they are worried about their future. When one in 10 people could be unemployed by the end of the year and the economic hit could last for three years, it is no wonder that they are concerned
It is right that the debate focuses on the furlough scheme and its extension—that is important—and the Liberal Democrats will support the Government’s motion. We have argued for some time that the furlough scheme should be extended to ease organisations and businesses back to work when it is safe to do so.
Consumer and business confidence has been on a roller coaster. Large tracts of the economy were shut down to suppress the virus. We had a slower easing in Scotland—which was frustrating for some businesses—as the Scottish Government pursued an elimination strategy or “zero Covid,” as some call it. We are now back to tighter restrictions in the west of Scotland, with others in Aberdeen before that and the rule of six is now in place, imposing restrictions on pubs and restaurants. The economic outlook is uncertain, which adds to the need to have the furlough scheme in place.
We should remind ourselves why we had the furlough scheme in the first place. It was as much a health protection measure as it was an economic one. It allowed people to stay safely at home when it was not safe to go out to work. People could not necessarily afford to stay at home and neither could businesses afford to keep them at home. The furlough scheme was there to protect people’s health as much as it was to protect the economy. It is right, as we are in an uncertain period with varying degrees of lockdown and restriction, that that support mechanism should continue for as long as those restrictions are in place.
The furlough scheme is also an economic measure. It is necessary to have the ability to keep viable companies alive while they wait for economic and health conditions to improve. The money that we have invested in that in recent months could be wasted if we withdraw support at the last minute. We need that support to continue for longer.
The debate should be about much more, however. That is why I am attracted to Jackie Baillie’s amendment, which sets out a broader ambition that the Scottish Government should focus on, beyond the inadequacies of the UK Government. The Logan review, the Higgins report and the work of Sandy Begbie are all steps in the right direction. I welcome the fortnightly discussions with the economy secretary and her advisers: those are useful.
However, we must think bigger. The country that we created after the second world war was bigger, bolder and better. We should have the same kind of ambition as we recover from the current economic catastrophe.
The chancellor’s announcement later this month will be the start of that process. I hope that he will set out a recovery plan that will be about not only the economic measures and interventions that we should make, but the size of the state. Any idea that the investment made over the past few months should be recovered in a short period of time, inflicting economic pain, is not one that we should pursue.
There is significant tolerance in international markets for greater borrowing by Government, because the United Kingdom is seen as a good place to invest. We should use that opportunity to build a new, better, greener economy, investing in renewable technologies while also making sure that our society is fairer and that we invest in our excellent universities.
We need to go beyond the furlough scheme. We have not mentioned the self-employed, who also need support. That is not mentioned in the motion, and it should be. We have not talked about the gaps in financial support that still exist, with people suffering far too much and way beyond what is necessary. Jamie Stone, a former member of the Scottish Parliament, has been doing a sterling job in ensuring that the Government addresses the support that is necessary for those people.
Alison Johnstone is right that there was an opportunity to introduce a universal basic income. I was disappointed that the minister did not even refer to it in his speech.
Will the member give way?
I am sorry, but I am about to conclude. I know that Mr Doris is desperate to get in.
The final thing that I want the Government to pursue is bringing forward the roll-out of the childcare proposition—we cannot afford to wait for up to a year for that to happen. There is no strong economic recovery without a robust childcare offer.
We move to the open debate. I call Keith Brown, to be followed by Gordon Lindhurst.16:06
The Covid-19 pandemic has without a doubt had an extremely serious impact on the economy, not only in the UK but right across the world. Scotland is no exception, with figures published yesterday confirming that our economy contracted by over 19 per cent in the second quarter of this year. The past six months have seen businesses and workers put into a serious situation, which the Scottish Government has sought to address with a package of support to businesses worth over £2.3 billion to protect Scotland’s economy and to ensure that as many people as possible keep their jobs.
Over two thirds of all Scottish firms still access the furlough scheme and it still supports 217,000 people in Scotland. I am happy to admit that the furlough scheme has been a crucial lifeline for people, protecting thousands of jobs in the Stirling and Clackmannanshire areas of my constituency alone. However, it is my view that the scheme does not go far enough, and I think that members who have seen the submission that we have all had from the Federation of Small Businesses in Scotland will also acknowledge that fact. The scheme should certainly not come to an end, as planned, in October.
Having spoken to local businesses in my constituency—in Clackmannanshire, Bridge of Allan and Dunblane—I know that many are not yet seeing normal levels of trade, which means that there is simply no way that they are in a financial position to retain their full workforces. Many of those businesses have a viable long-term future, but only if they continue to be supported and are allowed to recover. It is clear that to avoid a large number of redundancies and harming the longer-term economic position, some form of the job retention scheme needs to remain in place. As has been mentioned, research shows that extending the furlough scheme by even eight months could save 61,000 jobs in Scotland. The cost of saving those jobs would be met by the wider economic benefits that it would deliver, such as increasing gross domestic product, tax revenues and preventing higher levels of unemployment, which we know come with longer-term social and economic consequences.
For that reason, I welcome the range of efforts, as outlined by the minister, announced by the Scottish Government through its programme for government to train and retrain people who have lost their jobs through the crisis, as well as invest in supporting opportunities for young people and expanding the number of modern apprenticeship places available. All that will be crucial in reshaping our economy as we come out of the crisis. However, we are all acutely aware that the Scottish Government is doing that with a limited budget and no borrowing powers. In contrast, the UK Treasury has been able to fund business and employment support schemes to date entirely through borrowing. It is worth pointing out that it is not largesse given by a UK minister or the Treasury, but money borrowed at a cost to Scottish taxpayers—they pay for that.
It is now essential that the Scottish Parliament is granted the additional powers that it needs to properly manage a response to the crisis as we move towards recovery. While the UK Tory chancellor plans to prematurely end the furlough scheme entirely in just six weeks’ time, we are seeing European countries such as France committing to extending its employment support scheme until July 2022, while Italy confirmed an 18-week extension until the end of 2020 and Germany has confirmed that its Covid-adjusted scheme will continue until the end of 2021, bringing certainty—the point that Alison Johnstone made—to millions of workers and businesses who are worried about their future. The lack of worry and concern about people’s jobs helps the economy.
The jobs and livelihoods of many people in my constituency and across Scotland are on the line. The UK Government must rethink its catastrophic plan to scrap the furlough scheme early and extend the measures now, into 2021. I think that we all agree that large-scale unemployment seems extremely likely now, but it does not have to be long-term unemployment. We all know the costs of long-term unemployment from the mistakes that were made in the 1980s.
The Tories will not let Holyrood have the powers and will not borrow—let us face it, they are good at borrowing; the national debt has doubled to £2 trillion under the Tories. If they will not borrow for that good purpose, as was outlined, then they should give the Scottish Parliament the opportunity to do that. If they do not, the people of Scotland will not hesitate to let the Tories know what they think of them when it comes to the election next year.16:10
The Covid-19 public health measures have presented Scotland’s businesses and, crucially, workers with unprecedented and, sometimes, seemingly insurmountable challenges. Plunging demand, deserted town centres and lower spending levels mean that Scotland’s economy has become a challenging place in which to find and keep employment.
The UK Government has stepped up in some brilliant and well-publicised ways, most prominently in the form of the job retention scheme, which was a vital part of the effort in the early days of the crisis to prevent an economic catastrophe. As a result of that support, innumerable people have been able to live through this tumultuous period in relative security, support their families and avoid the worst effects of what amounted to an almost total shutdown of our physical economy, with no one to frequent coffee shops, buy goods on our high streets and support jobs in the parts of our economy that are dependent on Scots being able to go out, spend and live normal lives.
Although UK-wide action has not necessarily been perfect, the actions of the Scottish Government—crucial to employees of businesses around Scotland—have caused many unnecessary difficulties. In spite of massive funding from the UK Treasury for the Scottish Government to organise and distribute, the SNP has failed on many fronts. The legitimate complaints that I have received from constituents about the lack of support for businesses and individuals in Lothian have been specific, persistent and voluminous.
Will Gordon Lindhurst take an intervention?
Not at the minute. I am sorry—“In a minute” was what I meant to say.
There have been cases in which application deadlines have been abbreviated with little warning, for example. I understand that many have found themselves ineligible for more generous targeted industry support, such as the events industry support fund, because they had applied in good faith to more general schemes earlier on in the crisis.
Gordon Lindhurst refers to the correspondence that he has been receiving from his constituents. Has he had any article of correspondence from a constituent calling for an end to the furlough scheme? I have not had one.
I have had correspondence from constituents who are pleased with what the UK Government has provided and from those who have received support from the Scottish Government. The furlough scheme, as such, is not something that people have been focusing on, because it has been and is still running. A lot of people have written because they want businesses, the economy and the country to get back to normal, which, in part, will have to be through the current situation changing.
Other countries that have been referred to by members on the SNP benches have completely different set-ups for workers in their economies. For example, Denmark, which has been mentioned, has a different set-up and its scheme does not apply to the self-employed, owner-managers or people with casual contracts. Would the minister like to bring in a similar whole-scheme approach in which there is no legal minimum wage?
Germany is another example in which the country comes from a totally different position and has a different approach; Germany has a scheme that has been adjusted in the light of Covid but which goes back to something like 1924.
Those are different situations to that of the UK set-up or the circumstances in Scotland, and my constituents recognise that. They are not trying to simply lift examples from other countries to be used here, as the SNP Government suggests should be done—although it is not suggesting that whole systems should be lifted.
It is down to the UK chancellor to seek to do, as he has, what is best for the whole country in regard to a number of measures and not just the furlough scheme. That is what constituents expect from us.
I remind members who wish to take part in the debate to press their request-to-speak buttons in good time.16:15
I am pleased to be called to speak in this timely debate, brought by the Scottish Government, on the urgent need for the UK Government to signal an extension to its furlough scheme as soon as possible.
As we have heard, the furlough scheme is due to expire in just over six weeks. That would be a disaster for jobs, particularly those in the sectors that have been most heavily impacted by the Covid-19 global pandemic. The UK Government is on record as saying that it would do “whatever it takes” to protect jobs and livelihoods; therefore, it must act now.
The crisis is affecting people’s lives, careers and businesses, and their ability to pay their bills and look after their families. Predictions have been made that a failure on the part of the UK Government to signal an extension, in some form, to the furlough scheme will result, in short order, in a tsunami of redundancy notices being issued and significant job losses ensuing.
As the member for the Cowdenbeath constituency, which comprises many communities that are still fragile following the mass unemployment policies of the Thatcherite Tory Government of the 1980s, I find it absolutely unacceptable that we could see further scarring of those places, which still suffer from significant levels of deprivation. As we have heard, analysis carried out by the Scottish Government’s chief economist has estimated that the direct cost of extending the furlough scheme in Scotland until June next year would be around £850 million. He concluded that the ensuing economic benefits, such as an increase in GDP, would mean that such spending could effectively pay for itself. It is estimated that such an extension could save 61,000 Scottish jobs.
Perhaps I could put that £850 million up-front cost into context by recalling some examples. The current estimate for the UK Government’s spend on the high speed 2 rail project in England is £106 billion and counting; the estimate for the London crossrail project is £18 billion and counting; and, as was referred to earlier, the estimate for the Trident nuclear submarine renewal project is £205 billion and counting. If the UK Government can spend £205 billion on weapons of mass destruction, it would surely not be unreasonable for it to spend £850 million to save 61,000 jobs and so avoid both an economic crisis and the social devastation that would result from it.
In that regard, it is perhaps instructive to look furth of the UK, where we can see that extensions to equivalents of the furlough scheme have been made in, for example, Germany, France, Austria, Ireland, Switzerland and Australia. Indeed, it is worth noting that the extent of the fiscal stimulus package announced by the German Government in the summer is some €130 billion, which represents 4 per cent of Germany’s GDP. We can contrast that with the similar package announced by the UK Government, which represents £20 billion—that is quite a different level of spend and focus on economic recovery.
The reason why we are having to hold this debate is that the Scottish Parliament does not have the necessary powers just to get on and do what normal, independent countries across the world do—that is, borrow to help their economies through unprecedented times. If the UK Government will not extend the furlough scheme, we must secure the necessary borrowing powers to enable us to act to save jobs and businesses in Scotland, and to prevent mass unemployment and social devastation. That is what independent countries have opted to do, so, in the interests of our economy and wellbeing, I say that Scottish independence cannot come soon enough.16:19
I have only four minutes, so my comments will, naturally, be constrained. However, for the absence of doubt, and to avoid misrepresentation, I say that I support an extension of the furlough scheme beyond October, because I believe that that will make a difference to the economy—rather than what we heard in the last speech, yet again, which is the core position of the SNP. That was the easy bit.
I found it dispiriting to see the energy that so many in the Scottish Government have spent in establishing a dividing line on furlough. I see that as being in sharp contrast to their approach to the responsibilities and opportunity that power brings to them. There is an urgency to address the scale of the crisis that is not apparent in the Scottish Government’s response.
It is impossible to overstate how serious this is. People who were in secure work, or who were running the most secure of businesses, have seen the ground open up under their feet. People who worked in hospitality have already been made redundant, despite furlough. Many young people are already working their way around businesses, handing in CVs. People are spending all day applying for jobs, with little or no response. The scale of distress and despair is palpable; the response of Government has to be commensurate with it.
People in front-line hospitality and retail jobs, who are managing the Covid rules and the routine abuse that goes with that, are experiencing a deterioration in their conditions, and a seeping realisation—which on occasion is exploited by unscrupulous employers—that their jobs are so fragile that they dare not complain. In whatever schemes are developed, there is an issue about conditionality—about employee rights and expectations of businesses that are securing public funds.
Of course, intention without action is simply daydreaming. We need the Government to be proactive in creating and sustaining jobs, and in providing training in real terms. People in our communities need to know about, and be able to access, the targets, goals, funding and evidence. Talking about it takes us only so far.
I have some ideas about what may be done, and I would welcome the Scottish Government’s comments on them.
On the Scottish Government’s own funding, what budget lines have shifted to address the crisis, from the budget that it had decided? Has the Scottish Government changed the remit of Scottish Enterprise, so that it is again responsible for people and place—for the opportunities that people need, rather than just looking for success for businesses and giving them money? What new targets have been set for Skills Development Scotland to deliver training, jobs and apprenticeships, and how do people know that those exist? What funding has been made available, for example, to housing associations and co-operatives, to allow them to plan for economic opportunities in a local environment? How much of the money that has come from the UK has already gone out of the door?
As a matter of urgency, I ask what extra money has gone to local authorities. Money was made available to the Scottish Government to support local authorities, and the Cabinet Secretary for Finance said that, before she could release the money, she needed to know what their plans were. What a failure of imagination in being unable to understand exactly why local authorities need money now! It is needed to support care organisations; to give more support for vulnerable young people in schools, post-lockdown; to create home link workers and more cleaners; for partnerships that harness private, public and third sector organisations; for training providers, to give the economic and employment opportunities that people need; and to support the very organisations that can help people to cope with Covid and to access the opportunities that are out there.
This morning, the First Minister spoke about avoidable redundancies, in relation to furlough. Redundancies are happening now, in my city, in organisations that could help those who need support to secure work.
The crisis has been going on for seven months. Albeit that it is never enough, there is money. The fear is that delay means that the crisis gets worse, and that the money remains unspent, only perhaps to make a reappearance next year, when it is all too late.
If ever there was a time for Government leadership, it is now. The debate should have been about pulling together everyone in the Parliament, and beyond, to match the crisis. It is not enough to say what should be done elsewhere; the Government needs to work with all members in the Parliament to identify real plans and how to deliver them.
It is simply not good enough to say, “We’re going to do this and we’re going to do that,” when there is no real evidence that those initiatives are working out there in our communities.
Ms Lamont, you must conclude.
The UK Government needs to pay attention on the question of furlough, but we all have a responsibility to understand that that is a necessary but not sufficient condition to address the scale of the crisis that all too many people in our communities face.16:24
The debate is probably one of the most important ones that we can have, because we are dealing with people’s lives and livelihoods. I want all members to think about and acknowledge the fact that it is important that everyone works together so that we see ourselves through to the other side of the current situation. The issue goes beyond party colour, Parliaments and other institutions. At the end of the day, we are dealing with real lives and real issues.
At one point, I thought about redoing my speech from yesterday. I decided that I would spare colleagues that, because I have a whole lot of new stuff to bring to the debate. As I have said previously, retaining the job retention scheme is the most important thing that we can do, but it is just a start. It is one of the things that we can do in our economic recovery. We are, quite literally, dealing with people’s futures and their families and lives, and with the very important issue of keeping a roof over their heads. How we support them in their time of need in our varied constituencies is the most vital point during these difficult and challenging times.
The UK Government wants to withdraw the scheme next month, but that is just not good enough. We all know about yesterday’s announcement by the Scottish Government. This has been mentioned already, but it has to be said again that 61,000 jobs in Scotland would be saved if the furlough scheme was extended for eight months—that is 61,000 jobs saved by an eight-month extension. It would pay for itself through the wider economic benefits alone. However, even more important than that, it would help every man, woman and child who is supported by those 61,000 jobs.
We might think that the Conservatives would see the sense in extending the furlough scheme, but they do not appear to be listening. As I mentioned earlier, last week, in a debate in the House of Commons, the Chief Secretary to the Treasury, Steve Barclay, said:
“It is in no one’s long-term interests for the scheme to continue, least of all those trapped in a job that only exists because of the furlough scheme.”—[Official Report, House of Commons, 9 September 2020; Vol 679, c 634.]
I do not see that anyone in those circumstances is trapped in that job. It is supporting them through this difficult time and ensuring that they and their families have a future so that we can rebuild our economy when we get into a more positive place. Those people do not feel trapped by the job retention scheme; they feel that it is one bit of stability in a world that is in chaos as they try to get through. I urge Conservative members to look at the issue and talk to their colleagues in Westminster, because we all need to work together to ensure that we can provide for our constituents.
Yesterday, Mr Simpson said that there would be a “tsunami of job losses” if support was not provided. Well, this is the start. He should support the idea of continuing the job retention scheme, because that will help as we continue through these very challenging times.
So far, we have asked much of the people of Scotland during these difficult times. They have supported us in every way they can so that we can get through the current difficulties. If Westminster will not continue the scheme, let it get out the way and give the Scottish Parliament the powers to do so, and we will ensure that it supports Scotland’s people.16:29
Before I move on to the body of my speech, I think that it is important to reiterate the point that George Adam and Keith Brown have made, which is that the moneys that we get from the furlough scheme do not come through the generosity of the Tories at Westminster; they are moneys that every single person in Scotland, Wales and Northern Ireland has put into the Treasury through taxes. It is about time that that was recorded and that people were told about it. We are responsible for paying for the scheme, and we will do so, so we should have a say in how the money is spent. If we in this Parliament and people in Scotland more widely say that the furlough scheme should be extended, it should be extended. If people in England, Northern Ireland or Wales do not want it to be extended, that is up to them and their Governments, but we pay money in and we should have a bigger say in how it is spent.
Like many other members, I have been inundated by concerns from constituents who are deeply worried about what the future holds for them and their employment. There are hundreds of small and medium-sized businesses in my Glasgow Kelvin constituency, and their owners are terrified that those businesses will not be there in six months’ time, never mind a couple of years’ time. It is incredibly difficult for employers and their employees throughout the country, and they need our support.
It is a hammer blow that the UK Government is even thinking about withdrawing support, and if it does so, that will have a devastating effect. In Glasgow alone, up to 80,000 people have been furloughed. We welcome that, but, as I said at the start, we pay in money—people should not forget that—so it is not a handout that we are getting.
As Johann Lamont and others have mentioned, the sector that has been hardest hit—this is certainly true in my constituency—is the entertainment and recreation sector. More than half the workforce has been furloughed. We are very worried about what will happen in six months’ time, after the furlough scheme has ended. Will those businesses still be there? The night-time economy is important to Glasgow city centre and the rest of Scotland, but it is particularly important to my constituency. At the moment, because of Covid-19, night clubs cannot open. That is not the fault of businesses or employers. A caring Government would step in to help those businesses and to ensure that they flourished instead of having to close down. They are fighting for their existence. They have been put through so much and they are terribly worried that they will not be here at all, never mind be in a position to rebuild. The ending of the furlough scheme would be the death knell for all those businesses.
Glasgow is a UNESCO city of music and it puts on a variety of concerts. It is extremely worrying that many of those might not be held; it is already the case that we will not be having half the stuff that we would normally have at Christmas and new year. What will happen next year? As Annabelle Ewing mentioned, other European countries have far better furlough schemes. Keith Brown mentioned that countries such as France, Germany and Australia are extending their schemes until July 2021, and others are extending theirs to the end of this year. If they can do that, why cannot the UK Government?
I reiterate that we pay in a lot of money through taxes, and I think that we should have a say on where our taxes go. The furlough scheme should be extended.16:33
I refer members to my entry in the register of members’ interests, which states that I am a shareholder in a small business.
It is clear from the contributions of members across the chamber that we agree that the UK Government’s interventions were a lifeline in protecting nearly a third of Scotland’s workforce. In my constituency, around 11,000 jobs were furloughed.
Although the chancellor’s support for businesses in all parts of the UK was unprecedented, today we are discussing what more can be done with the economic levers that we have available here. Given that we have a shrinking economy that is now 21.1 per cent smaller than it was in 2019, the Scottish National Party Government must take affirmative action to help people who are at risk of unemployment and those who are furthest away from the job market. However, we cannot let Scottish workers dangle in perpetuity. A shrinking economy means less on the order books, fewer widgets and fewer employees. Less work leads to a reduced workforce, and sustaining the same number of employees in an organisation becomes unsustainable.
The SNP has done the sums. My question to it is this: what will happen if we are still in the pandemic eight months down the line or beyond? The furlough scheme is almost like a holding chamber for the workforce, and I think that we should be looking beyond it to interventions that reskill, upskill and retrain people. We should be looking to give people dignity through schemes such as fair start Scotland but, frankly, those schemes are a shambles.
Compounding the woeful economic outlook, there have been restrictions on many businesses because of Government policies and localised and regional lockdowns. It is important that the SNP looks at ways to support businesses more fervently. We all know that it is not their fault.
I agree with Johann Lamont that, instead of putting all her eggs in one basket, Nicola Sturgeon should consider the measures that are in the gift of her own Government, such as extending the 100 per cent business rates relief and repurposing areas of the Scottish budget. She should reconsider what we can do in that sense. We have also not heard what has happened to the £6.5 billion in Barnett consequentials that have come to the Parliament. Has all the money been spent on businesses, as Nicola Sturgeon promised?
It is exceptionally difficult to find employment at the moment, especially for young people and women, who have been worst affected by the pandemic. The number of women who are in insecure and temporary jobs has risen by one third in the time that this Scottish National Party Government has been in power. Furthermore, women are more likely to lose their jobs or to be affected by underemployment during a recession.
That is also true for young people. Leaving school, college, or university must be incredibly daunting right now. The latest universal credit figures, which are for June and July, show that a higher proportion of people starting on UC—more than at any point in the past several years—have been in the 16 to 24-year-old group. We have seen the UK Government act swiftly, through the kickstart scheme, to provide an unprecedented £2 billion in funding along with the job retention bonus scheme that my colleague Maurice Golden spoke about. We have also seen significant financial and policy backing to help young people to get on the jobs ladder and to help businesses to retain employees.
Concerningly, that ambitious package of measures sits in stark contrast to what is on offer from this Government. Nicola Sturgeon said of young people that is not their fault and it certainly is not. Jackie Baillie is absolutely right. Take for example the SNP’s youth guarantee, which is worth £60 million. Although it and Sandy Begbie’s report are welcome, it falls woefully short of what Scottish young people need right now. The first report on the youth guarantee scheme admitted that work has not even started on an implementation plan. When, where, and how will it start? We need to move on this. We have not got much time. I have not got much time, so I am going to sit down.16:37
I thank Rachael Hamilton for trying to get some consensus there—well done Ms Hamilton.
None of us really knows what the economy will look like this time next year. There is uncertainty about demand and markets, not just because of the Covid restrictions caused by lockdown but because of Brexit uncertainty.
I notice that the Scottish Government has estimated that extending furlough—quite rightly called the job retention scheme—could save 61,000 jobs. We should just think of the demand that would be generated by that, or indeed lost if 61,000 workers were moved from paid employment on to benefits.
Rachael Hamilton mentioned widgets. I will tell her what will happen when we put people on to benefits and the economy bounces back: we will be importing those widgets from Germany and keeping people on benefits in Scotland. I say to Ms Hamilton that it is time to support the Scottish workforce.
Of course, it is the human cost that will take its toll. If individuals and families are out of work and on benefits, or on reduced and fixed incomes, that will cause real hardship. It also might take many years for the jobs that are lost to the economy to return.
The UK Government called the loan scheme, which I welcomed, the bounce back loan scheme but, without an extension to furlough, there may be no jobs to bounce back to. I ask again: what will the economy look like this time next year when we have ditched our highly skilled jobs and others have retained theirs? We will be importing, and that will damage our economy. It makes no sense.
The furlough scheme is sustaining my constituents’ jobs, and I have no doubt that ending it will result in many jobs being lost. I urge Rishi Sunak, as the vast majority of members in this Parliament do, to think again on the furlough scheme. He should take a compliment. We think that the scheme has worked very well, and we want it to continue. If required, it should be targeted at the manufacturing industry, transport and aviation, hospitality and so on.
I also have no doubt that the economic crisis and recession will cause huge inequalities. I do not think that anyone has referred to the Close the Gap briefing that we received ahead of the debate. I will do so now to show the impact that the crisis is likely to have on women. The briefing says that, because of occupational segregation, women are more likely to work in a shutdown sector, such as hospitality and retail. That is especially the case for black, Asian and minority ethnic women and younger women. Women are more likely to have lost their jobs and had their hours cut. Women already face economic inequality within society, and the pandemic will only compound it.
The same is true for BAME members in my constituency and for the predominantly working-class communities that I serve. I worry that my Glasgow Maryhill and Springburn constituency will be disproportionately impacted by the pandemic.
In the time that I have left, I want to talk about a universal basic income, which a few members have mentioned. I am referring to it only because others have brought it up. It is not possible to deliver a universal basic income without the Scottish Parliament having full fiscal powers or without the compliance of the UK Government. We currently have neither. That is not just my view; it is the perspective of the Social Security Committee of this Parliament.
Other members have mentioned the Scottish youth guarantee, which involves £60 million for starters, and the UK Government’s kickstart scheme, which involves £2 billion across the UK. My understanding is that, under the kickstart scheme, young people up to 24 years old will be paid a minimum wage for up to 25 hours a week for six months. That is welcome, to a degree. However, to be honest, I would rather that the money that will be paid out through the kickstart scheme be given to this Government, so that a co-ordinated, essential and strategic youth guarantee can come from this Parliament. I do not trust the UK Government to manage that money well.
There is almost full agreement, with the exception of the Conservatives, on sustaining and extending the furlough scheme. Despite the tone of some of the debate, there is consensus—again, with the exception of the Conservatives—on the vast majority of things that we have to do to address the economic crisis that has been caused by Covid-19. I hope that we find a way to express that consensus more often in the chamber.16:42
The points today have been well made. There can be absolutely no doubt that the UK Government should extend the furlough scheme. Six countries, including our neighbours in France and Ireland, have already extended their equivalent schemes, so let us not be last to the party. Yes, many folk are now back at work but, equally, there are sectors in which people are not, and might not be for some time. As we have heard, the tourism and hospitality sectors are particularly affected. As Bob Doris mentioned, Close the Gap provided us with a briefing that reports a disproportionate impact on women.
We do not know what will happen in relation to further local, or even national, restrictions. There is talk of curfews and of pubs and restaurants closing at 10 o’clock as we go into the winter, so let us take a commonsense approach and expand the scheme.
I want to focus my speech on local issues that have been brought to me; as is the case for other members, there have been many—far too many to mention today. I have already said that the hospitality and tourism sectors are struggling. Owners of small businesses, such as pubs and restaurants across Coatbridge and Chryston, have come to me with concerns about what the end of the furlough scheme will mean. Some local pubs and restaurants have already shut their doors. We cannot stand back and allow there to be more—people’s jobs and livelihoods are on the line. The furlough scheme could help if there is another full lockdown or if curfews are introduced in the coming months and fewer staff are needed.
I have also been contacted by nightclub owners. As Sandra White said, the furlough scheme has been a massive safety net for them. With little prospect of nightclubs opening any time soon—at least, not in their pre-Covid form—here is yet another whole industry that can be supported by simply continuing the furlough scheme.
Soft-play centres are in a very similar position, although they have an indicative opening date in early October. We have to say that nothing is certain, given the way that things are going with infection rates, and soft-play centres have already remained closed for a long time. I spoke to the owner of Funky Monkeys soft-play centre in Coatbridge, which is an excellent facility that I hope colleagues with children—I am looking at Bob Doris—will get a chance to visit in the future. The owner told me that although the £10,000 grant near the start was welcome, the centre is now on its knees. To take furlough away from such businesses at this hour could be the final straw.
Do not get me wrong: sectors that remain affected such as nightclubs, soft-play centres and others about which we have heard—dance groups, the wedding industry and more—need more support than the furlough scheme. I have written recently to the Government about soft-play facilities but, again, I know that much of that support relies on UK funding. The simple message from the debate is that the removal of furlough could exacerbate the situation. We are here to stand up for our constituents locally so I hope that everyone—regardless of their party—will do that at decision time.
I also want to touch on leisure trusts and that sector generally. Brian Whittle asked at First Minister’s questions today about the pressures that the sector faces, but I politely say to my colleague that one of the possible fixes for that situation is for him and his party to support the motion today and to call for an extension of the furlough scheme.
My friends who work in the North Lanarkshire Leisure and South Lanarkshire Leisure and Culture Glasgow Trusts have been on furlough through this time. Although their industry is now returning, as we know, it does so to a major period of uncertainty. The famous time capsule water park in Coatbridge is due to open at the end of the month on a much-restricted basis—quite rightly, as we need to put safety first—and it stands to reason that less staff will be required.
That is the situation across the leisure sector, especially as some activities cannot yet return. The furlough scheme is essential to get those bodies through this further difficult period and to help them to readjust to different staffing needs.
The SNP Government has taken action to support both employers and employees whom coronavirus has impacted and we will do everything in our power to ensure that our economy and labour market feel supported. A package of £2.3 billion has been put in place so far and we have committed a further £100 million to targeted employment support. However we all need to do our bit—everybody does—so I call again on everybody to support the motion for an extension of the furlough scheme.
We move to closing speeches. I remind members that all those who take part in the debate should be back in the chamber for those.16:47
In closing for Labour, I want to reiterate the point that Jackie Baillie made: Scotland cannot build back better in isolation from the rest of the UK, which is why we need a partnership that includes the UK Government, the Welsh Government and the Northern Ireland Assembly as well as the regions across the UK. We build back better when we can do so together.
Willie Rennie made a pertinent point about the danger that all the good work that the chancellor created through the introduction of the furlough scheme, which the majority of members in the chamber welcome, could be lost. If the Scottish Tories support the idea that we need to build back together across the UK, they should knock down the door of number 11 and push for the UK Government to extend the furlough scheme. The Tory amendment does not address the key issue of the Government’s motion, so Labour cannot support it.
Willie Rennie also made reference to the Keynesian economics of the post-war consensus. I agree with him and believe that it is time for a new post-Keynesian consensus for building the country back as we recover from the pandemic. Guaranteed jobs and access to education, skills, training for new jobs and housing must be at the forefront of that process. We need to build the country back through an investment in our infrastructure and in many of the existing needs of our communities. We support the Government motion.
George Adam asked for Scotland to be given more powers so that it can use them. We ask members today to use the powers of this Parliament and not to make excuses and blame others—I believe that the Scottish people will start to see through that argument. We, in this Parliament, have the powers to begin that build-back process and it is high time that we used them. This is a strong Parliament and we should use every power at our disposal.
One example is Scottish Labour’s plan for a green new deal and the creation of good skilled jobs; that includes expanding Scotland’s bus network and investing in buying new electric buses from domestic manufacturers, which would create direct jobs in Scotland.
We need to see a national house building programme across Scotland in order to demonstrate—
Will the member take an intervention?
I will in a minute.
We need such a programme to demonstrate that we can invest in housing and put a roof over people’s heads. The housing crisis in this country is unacceptable and we have the powers to be able to invest in a national house building programme.
We should be looking at fuel poverty legislation—in my view, the act that this Parliament passed lacked ambition and we should be investing in that area. Our budget for investing in flood prevention is far too low when there is flooding across Scotland as a result of climate change. That is one example where that level of investment could be brought about.
I welcome Mr Rowley’s comments, because he has a strong track record in this Parliament of trying to reach a budget consensus with the Scottish Government. He has provided lots of ideas for what could be budget negotiations with the Scottish Government. I do not work at that pay grade, but I hope that Mr Rowley is signalling that the Labour Party wants to secure consensus and a budget that is in Scotland’s national interest going forward, rather than posturing on the budget. I would welcome any comments on that.
We need to work together on this. First, the capital budget for this year has been underspent. Labour supports an extension of the borrowing powers from this Parliament and we will work with the Scottish Government to make that case. Housing and flood control are examples of areas in which major capital investment could be made in a way that would address the housing crisis and create jobs, while giving people opportunities to develop their skills and in education and training. We need a programme.
We urge the Tories to knock down the door at number 11 to get an extension to the furlough scheme. To this Parliament, we say, “Let us use the powers of this Parliament to invest in Scotland’s future.”16:52
The debate has been short, and there has been some consensus and there have been some points of disagreement. I will start with the points of consensus.
There has been broad recognition by members across chamber of the value and importance of the coronavirus job retention scheme. More than 900,000 jobs have been supported and of those, more than 50 per cent of people had returned to work by August. Even the SNP’s paper that was published, I think, yesterday, about the SNP’s plans to extend the scheme, says that
“The UK scheme compares favourably to wage subsidy schemes in other countries.”
The SNP credits the scheme with keeping unemployment in Scotland at a rate that is 3 per cent to 4 per cent lower than it otherwise would have been. I welcome that, as well as the minister’s comments acknowledging that it is one of the most generous schemes in the world, and that it has made a huge difference to supporting the Scottish economy.
Of course, that is not the only thing that the UK Government has done to support jobs in Scotland. The job retention bonus, which was mentioned by Maurice Golden, provides £1,000 for every employee who has been kept on, and the £2 billion in the kickstart scheme creates hundreds of thousands of high-quality work placements. There has been expansion in work-search support for people who are searching for work, a cut in VAT for hospitality and the eat out to help out scheme. And so the list goes on.
However, we are here to talk specifically about the job retention scheme. I recognise the concern of many members about what will happen when that scheme comes to an end at the end of October. I have also heard that concern from businesses that are worried about the prospect of a cliff edge. While a lot of people have gone back to work, some sectors of the economy are struggling because they are still restricted.
Earlier I had an exchange with the cabinet secretary about the wedding industry. It is desperate to get back to work but is, because of the current restrictions, very much constrained in doing so. Therefore, many of its employees are furloughed.
What will we do next? This afternoon the SNP has called for an extension to the furlough scheme. It is, of course, the easiest thing in the world for the SNP Government to call for something to be done by somebody else when it will not have to pay for it, and that somebody else will.
As Alex Rowley pointed out in his winding-up speech, we have to look at what the Scottish Government can do to assist. Remember that the Scottish Government has been given a guarantee of an additional £6.5 billion in the current financial year. Johann Lamont made a very good point when she asked whether all that money has been wisely spent. Has it all been spent? Where has it gone? We still do not know how much of it has been spent or where it has all gone. We could do with answers to those questions.
In the context of money, let us not forget that the SNP Government has, since 2007, benefited from fiscal transfers from the rest of the UK totalling over £62 billion. I repeat: £62 billion has come from the rest of the UK to support spending in Scotland.
It would not be a debate in this chamber without the usual tiresome mentions of independence by SNP members. We even had them from the minister. “If only we were independent, we could extend the furlough scheme indefinitely—forever.” There was no word about how it would be paid for. There would not be enough in the way of unicorns and fairy dust in an independent Scotland to pay for the furlough scheme that we have had, never mind an extension to it. The SNP Government simply could not have afforded it.
I accept the point that a number of members made, that there are issues for business as we get towards the end of October. We need to look at what can be done to fill the gap. There is an argument for considering extension to the furlough scheme, and there might be an argument for looking at extensions in particular sectors of the economy that have been hardest hit. However, there is no conclusive argument, which is why we do not support the Government’s motion. We are not persuaded that that is the only answer at this point.
I say that because the economy is changing, and we have to recognise that. Some jobs that existed before Covid might not have a long-term future, because of economic changes. For example, we know that, as a result of Covid, many people will work from home instead of commuting to a workplace. That will have an impact on the supply and servicing of office space. It will have an impact on transport services, including the number of people who use public transport. We heard about the impact on aviation in yesterday’s debate. I suspect that it will be a long time before people are flying in the numbers in which they were flying last year. A furlough scheme extension of eight months will not be a lot of help in the long term to people in that sector.
Rachael Hamilton made a really important point. We need to be supporting the people who are in jobs that might not have a long-term future because of economic change, and we need to use resources for retraining and support, instead of for extending the furlough scheme for those people for a longer period. We should be looking at that sort of solution.
Something should replace the furlough scheme—that is what we say. It might be a targeted extension, or it might be a direct job subsidy. It might be more cuts to employers’ national insurance contributions, or it might be something else. I know that the chancellor, Rishi Sunak, will be looking at all those possibilities. This Parliament should not be tying his hands to one particular solution when there is a wide range of alternatives that he is looking at to ensure that we address the legitimate concerns of the business community about what is going to happen after the furlough scheme ends—[Interruption.]
I hear members shouting. I would have been happy to take an intervention, but I am in my final minute.
I will say this in closing. We should recognise the benefits of the furlough scheme; it has been massively to the advantage of workers and business in Scotland. We should also agree that we need more action to be taken by the UK Government after the end of October. However, we should consider all the options and not tie ourselves to one particular outcome, as the motion would do.
Above all, we need to ask the Scottish Government to look to its own resources, which is all the extra money that it has been given to support business in Scotland better than it has been doing. That is the point that we make in our amendment, which I am pleased to support.
I call Jamie Hepburn to wind up the debate.17:00
I thank all those who have contributed to the debate from across all parts of the chamber. Like Murdo Fraser, I try to seek consensus on these matters, and I was going to reflect on how consensual his contribution was right up until the moment when he started to go off on one about unicorns and fairy dust, which was not such a positive contribution.
We are debating a serious issue of the utmost importance: how we sustain our economy, our business and our people in what continues to be an extraordinarily difficult period. Consensus has been reached today that the job retention scheme established by the UK Government—to its credit—has been an effective mechanism and a vital contribution in supporting and sustaining people over the last period of time.
I thought it was interesting that Murdo Fraser said that more action will be necessary and something else should be put in place, but it was telling that he did not say what should replace the job retention scheme—neither does the Conservative amendment. In reflecting on the point that he made when intervening on me and on his contribution on the success of the scheme that has been in place and has supported people, surely our starting position should be to look at the scheme and consider an extension of it as a sensible way forward.
I am genuinely surprised that the minster was not listening to the range of alternative possibilities that I laid out. I talked about a possible extension of the scheme on a sectoral basis, a new job subsidy support and cuts to national insurance. We have put forward a range of possibilities in the debate. What we have been saying is that we should not be stuck on only one outcome, as the Scottish Government is.
I cannot help but notice that the Conservatives did not settle on a proposition and place it before Parliament today for our consideration. We have done that, and I hope that the Parliament will reflect on the success of the scheme and the necessity to continue it over the coming period of time. We must send a clear and strong message to the UK Government at decision time.
I listened carefully to the points that were raised during the debate, and I recognise—I made this point clearly in my opening remarks—that it is incumbent on this Government to respond to the circumstances that we find ourselves in. I have laid out the range of ways in which we are seeking to do that, and I agree that that has to be a collective and shared endeavour, such is the nature of the crisis before us. If any member wants dialogue on any element of what we seek to take forward on the youth guarantee, we would be very happy to have that dialogue.
Members will be unsurprised to hear that we will not support the Conservative amendment, not least because it would remove the call to extend the furlough scheme, which has been the very point of today’s debate. I thought it was interesting—it goes back to the point that I have been making about reflecting on the success of the scheme—that Maurice Golden complained about SNP members booing the scheme. We are certainly not doing that today; we are calling for an extension of the scheme.
In recognising that we should do that, I thought that it was an odd observation that Mr Golden made about the wider economic impact in relation to his concerns about borrowing. We know that the job retention bonus scheme, which Rachael Hamilton mentioned, will be paid for through borrowing. It will cost £9.4 billion. We also know that, at £10 billion, a short-term extension to the furlough scheme would cost only marginally more. We should consider the comments of the Resolution Foundation, which said:
“The Job Retention Bonus of £1,000 for firms that bring back furloughed workers and still employ them in January will not make a major difference to employment levels.”
The National Institute of Economic and Social Research said that extending the furlough scheme by a further eight months, at an estimated cost of £10 billion,
“would have been a relatively inexpensive measure, and by preventing a rise in long-term unemployment might have paid for itself.”
We call on the UK Government to do what other jurisdictions in other countries are doing in extending their equivalents of the furlough scheme. Gordon Lindhurst asked whether I believe that we should lift systems from the other countries that have been mentioned. No, I do not believe that we should do that, but I believe that, in Scotland and across the UK, we should look to the examples of Austria, Belgium, France, Germany, Italy, Ireland, Sweden, Switzerland and—further afield—Australia and Canada. We should not seek to ape or replicate their schemes but should copy what they are doing in recognising the necessity of extending the period of their equivalent furlough schemes in order to see people over the course of this difficult time.
Jackie Baillie’s amendment makes reference to a number of areas in which the Scottish Government has already taken action to soften the impact of the pandemic, and we will support her amendment. Our current economic strategy, which is based on the mutually reinforcing powers of boosting competitiveness and tackling inequality, remains in place.
We have published a range of strategies in areas including transport, manufacturing and innovation. Our infrastructure investment plan is helping to boost inclusive economic growth, tackle the global climate emergency and build sustainable places. Our future skills action plan points us in the direction of providing people with the attributes and talents that will be needed for the industries of the future, responding to the point that was made in conclusion by Mr Fraser. Of course, we must ensure that people have that skill set.
The programme for government commits us to introducing an inward investment plan and updating our climate change plan. The national manufacturing institute is beginning its work to support innovation skills and productivity.
All those measures are in place to ensure that we have an industrial strategy to meet current and future economic, social and environmental challenges and opportunities.
It was interesting that Ms Baillie said that it would be the easiest thing in the world to blame the UK Government when things go wrong. I am not doing that, because, in this instance, it has not yet gone wrong; the UK Government still has the opportunity to recognise the necessity of extending the job retention scheme.
As though I was blissfully unaware of it, Johann Lamont was at pains to mention the scale and nature of the challenges that we face, here and now, in Scotland. I am fully cognisant of those challenges, which is why we are responding with the range of initiatives that we are putting in place, such as the green jobs fund, the transition training fund and the youth guarantee. We are maximising our range of capital investment to create opportunities in Scotland.
We will continue to act in recognition of the challenge that the virus brings and the fact that it has not gone away. We will play our part in responding to support people in the face of Covid-19, but so, too, must the UK Government. It must extend its income support schemes through the job retention scheme and, in response to Rachael Hamilton’s question, for as long as is needed. We cannot stand back and do nothing in the face of a potential tsunami of avoidable redundancies. We will not do that, but will the UK Government? This evening, we have the chance to stand together and tell the UK Government that the job retention scheme must be extended.