Sunak Faces Costly Choice on Covid Aid Amid Scottish Fury


U.K. Chancellor of the Exchequer Rishi Sunak faces another expensive dilemma: write a blank check to support Scotland through the pandemic or risk bolstering support for independence north of the border.

The Scottish National Party accused Boris Johnson’s administration of prioritizing English jobs with its coronavirus financial aid after Sunak only extended a U.K.-wide wage support program when England was placed into a four-week partial lockdown.

The government in London has since issued conflicting messages on whether the support will be available to Scotland if it enters lockdown after England eases restrictions on Dec. 2. The prime minister told Parliament on Monday it “has to be right” for the aid to be available, only for Cabinet minister Robert Jenrick to backtrack hours later, saying Sunak will decide.

“Woolly words don’t pay anyone’s wages, we need clarity from the Treasury,” Scottish First Minister and SNP leader Nicola Sturgeon told reporters Tuesday. “It should be a level playing field and hopefully we will get to that situation.”

While Sunak’s financial support measures cover all of the U.K., the devolved administrations of Scotland, Wales and Northern Ireland run their own health policy, meaning lockdowns and social-distancing rules have been implemented at different times.

Political Risk

That’s why the timing of the Chancellor’s decision to extend his flagship furlough program, under which the state pays as much as 80% of people’s wages, carries huge political significance.

Sunak had resisted extending the program for weeks, even though Wales -- which entered its own lockdown as a “firebreak” last month -- and regions of northern England facing tougher restrictions than the rest of the country, asked for the same level of support.

In the House of Commons on Tuesday, Chief Secretary to the Treasury Steve Barclay was asked repeatedly to confirm the program would be available in future lockdowns outside England.

“The government will always be there to provide support for all parts of the United Kingdom,” Barclay replied to one question from former Conservative Secretary of Sate for Scotland David Mundell. The answer, and others like it, didn’t end the calls for clarity.

The confusion risks playing into the SNP’s separatist agenda, and even the leader of Johnson’s own Conservative Party in Scotland pressed him for a commitment on Monday.

“The crucial answer that we need is whether it will be available to other nations of the United Kingdom if, in future, the science demands that further lockdowns are required anywhere in the country,” Douglas Ross, who represents the Scottish district of Moray, told Johnson. “If he cannot give that commitment, will he explain why it seems that an English job is more important than a Welsh, Northern Irish or Scottish one?”

In a separate move to beef up its coronavirus assistance program, the government on Tuesday said it would extend until the end of April the suspension of the minimum income floor in its Universal Credit social-security program. It had been due to expire on Nov. 12.

The floor, which is based on a full-time minimum wage for employees, assumes the lowest-paid self-employed workers earn more than actually do, cutting the top-up benefits they receive. Unions and analysts had warned of a severe blow to struggling workers if the floor was reinstated, with the Institute for Fiscal Studies estimating affected households have benefited by the equivalent of 3,000 pounds ($3,917) a year during the suspension.

©2020 Bloomberg L.P.

BQ Install

Bloomberg Quint

Add BloombergQuint App to Home screen.