Nicola Sturgeon demands furlough extension at UK leaders’ summit

Michael Gove today insisted the government is ‘open-minded’ about extending the massive furlough scheme – after Nicola Sturgeon demanded it stays in place beyond September.

The Cabinet Office minister signalled the bailout – which has been costing about £4billion a month – could be kept in place longer ahead of a summit with the UK nations.

The virtual ‘Covid recovery’ meeting involves Boris Johnson and the leaders of the devolved governments in Edinburgh, Cardiff and Belfast.

The discussion had been due to take place last week but was postponed after the Ms Sturgeon and Wales’s Mark Drakeford pulled out demanding assurances it will be a ‘meaningful discussion with substantive outcomes’.

An analysis of Treasury figures by the Resolution Foundation has calculated that two billion days of furlough had been claimed up to April – the latest date that detailed statistics are available. The total cost has hit £64billion.

Meanwhile, ONS data up to mid-May – which is considered less accurate but more recent – showed the proportion of the workforce on furlough dropped to 8 per cent.

That is equivalent to around 2.1million people, the lowest since last October. 

Speaking ahead of the summit, Mr Gove said the initiative, which sees the taxpayer pay cash towards workers’ wages, had been a ‘huge success’ that was only possible ‘thanks to the broad shoulders of the UK Treasury’.

Michael Gove (right) today insisted the government is ‘open-minded’ about extending the massive furlough scheme – after Nicola Sturgeon (left) demanded it stays in place beyond September

The virtual ‘Covid recovery’ meeting involves Boris Johnson (pictured yesterday) and the leaders of the devolved governments in Edinburgh, Cardiff and Belfast

The UK Government minister insisted higher spending as a response to the coronavirus pandemic would continue, as the country as a whole seeks to ‘build back better’.

Asked whether that meant furlough could continue, he told BBC Radio Scotland’s Good Morning Scotland programme: ‘We are open minded, yes.’ 

‘We’ll be spending more.

‘We’ll be spending more on the NHS, we will be spending more on education, we will be spending more on criminal justice, because in all of these areas it is absolutely vital that we build back better.

‘Extra funding for everyone will continue, and it is important we all learn from each other about how that money should be spent.’

Dan Tomlinson, Senior Economist at the Resolution Foundation, said: ‘Employees have clocked up two billion days’ worth of furlough since the start of the pandemic. This shows just how big an impact the pandemic has had on the economy – and how vital the furlough scheme has been in term of preventing mass unemployment.’   

Ahead of the summit, the Scottish First Minister called on the UK Government to extend furlough again – and ensure pre-existing inequalities are not further exacerbated by the crisis.

In a thinly-veiled reference to her push for independence, Ms Sturgeon complained about ‘limited powers’.

She said: ‘We have done everything we can with the limited powers we have to tackle inequality and mitigate the impact the pandemic has had on people’s livelihoods, but we cannot allow that to be eroded as we enter the next phase of living with the virus.

‘A return to the pre-pandemic austerity would be disastrous for jobs, for public services and for people and families across Scotland.

Mark Drakeford is also attending the virtual summit of UK leaders this afternoon

‘As the UK Government hold the key financial levers to help us recover from this, I will be calling on it to commit to maintain public spending during the period of recovery, and to extend the furlough scheme for as long as it is needed to protect businesses and people who have been required to stop working to protect others, and I will be emphasising that it is managed sensitively in a way that supports longer-term recovery.’

Mr Johnson called the meeting in the wake of the Welsh and Scottish parliamentary elections last month as he called for a united approach ‘to overcome the significant challenges of the Covid recovery’.

The virtual summit is due to be attended by the four nations’ first ministers and deputy first ministers as well as Chancellor Rishi Sunak, the Chancellor of the Duchy of Lancaster Mr Gove and the UK Government’s secretaries of state for Scotland, Wales and Northern Ireland.