U.K.’s Job Retention Program Will Need Extending, Sturgeon Says

(Bloomberg) -- The U.K.’s employment support programs aimed at shielding workers from the worst economic effects of the coronavirus pandemic will need to be extended, the leader of Scotland’s government said.

The current support package is due to end in October and it’s “almost certain” that it will have to continue, Scottish First Minister Nicola Sturgeon told reporters in Edinburgh on Tuesday. The Scottish government has written to U.K. Chancellor of the Exchequer Rishi Sunak, she said.

“We haven’t had any definitive indication from the U.K. government about whether it will extend it, but we remain positive that there will be a positive outcome,” Sturgeon said.

The latest figures showed U.K. jobless claims more than doubled to almost 3 million during the virus lockdown, adding to pressure on Prime Minister Boris Johnson and the central bank to do more to support a nationwide economic recovery. Scotland’s unemployment rate is the highest of all U.K. nations, now standing at 4.6% compared to a national rate of 3.9%.

While the headline Scottish numbers are “deeply troubling,” there’s a clear risk that the furlough programs are masking the full impact of the crisis and that the economic reality is likely to be much worse, Sturgeon said.

Of Scotland’s 5.5 million population, more than 600,000 workers have been furloughed, Economy Secretary Fiona Hyslop said.

Scotland’s semi-autonomous government, which is responsible for health, education and other parts of the economy, has rejected Johnson’s plans to emerge from the lockdown more quickly. It doesn’t have the powers to unilaterally extend employment support.

©2020 Bloomberg L.P.

BQ Install

Bloomberg Quint

Add BloombergQuint App to Home screen.