Nicola Sturgeon warns furlough replacement will cost jobs

Nicola Sturgeon has stepped up calls for the UK Government to rethink plans for its replacement furlough scheme amid concerns it will cost jobs.

Unemployment is set to rise significantly in the coming months

The First Minister spoke out as the latest unemployment statistics for Scotland showed that the country's jobless rate remained fairly stable over the Summer at 4.5%, although many economic experts warned that the situation is likely to deteriorate as the full impact of the Covid pandemic feeds through.

Ms Sturgeon said that the figures would be much worse had there not been support in place from the Scottish and UK Governments.

She added: "The UK Government's Job Retention Scheme in particular has been really important and of course we still have concerns that the replacement for that scheme which will take effect at the start of November is not comprehensive enough.

"That could lead to a significant rise in unemployment, including in jobs in sectors that, while they may be struggling through Covid, have a good long future.

"The Scottish Government will of course continue to make that case to the UK Government, but just as importantly, we will also continue to provide our own support whenever we have the powers and resources to do so."

The replacement furlough scheme will mean that if staff work for at least a third of their hours, the UK Government will then help top up wages, with companies asked to pay 55% of the bill.

There are now 124,000 people in Scotland seeking work, the official figures revealed.

The Office for National Statistics (ONS) also said the employment rate in Scotland rose slightly in June to August, to 73.9%.

The UK's unemployment rate rose to 4.5% over the same period, with an estimated 1.5 million people looking for work.

Scottish Secretary Alister Jack said admitted that the figures are a "concern."

"We know that there will be further challenges to come," he went on.

“The UK Government is doing everything possible to protect jobs and livelihoods in the face of the global pandemic.

“We are supporting nearly half a million jobs in Scotland through our furlough and self-employed schemes and have committed a further £9 billion to help employers keep workers on.

“We are also investing billions in those looking for work, including our £2 billion Kickstart scheme for young people and doubling the number of work coaches.

“On top of extensive direct UK Government support to people and businesses across Scotland, we are also providing the devolved administration in Scotland with an additional £7.2 billion to help them get through the pandemic.”

There were 2,329,000 payrolled employees in Scotland over the quarter, a decrease of 2.7% compared with September 2019.

Paul Johnson, from the Institute for Fiscal Studies, said the latest ONS figures were still "remarkably modest".

"I think we're going to see very dramatically higher levels of unemployment over the next six to nine months," he told BBC Radio's Good Morning Scotland programme.

"I think there's a good chance I'm afraid that we'll get up to levels of unemployment next year not seen since the early 1990s - and that's despite the £200bn worth of support the government has poured into the economy over the last six months."

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