Chancellor resists calls to extend furlough scheme with targeted response

Chancellor Rishi Sunak is resisting calls to extend the furlough scheme with targeted measures to stave off widespread job losses, saying the support cannot go on “indefinitely”.

The scheme that has so far cost £33.8bn supporting the payrolls of 9.6 million workers during the coronavirus crisis has begun tapering off before ending completely in October.

But opposition parties are calling for the government to extend it for the hardest-hit sectors and those plunged into local lockdown, warning the end to the scheme is a “grave mistake”.

Sunak visited Glasgow on Friday to praise the benefits the programme has had to Scotland amid rising concerns the crisis has strengthened the demand for independence in the nation.

He warned “there is hardship ahead for many people” as he again ruled out extending the jobs retention scheme.

“It’s one of the most difficult decisions I’ve had to make in this job,” he told Sky News.

“I don’t think it’s fair to extend this indefinitely, it’s not fair to the people on it. We shouldn’t pretend there is in every case a job to go back to.”

He declined to extend the measure for sectors unable to return to work, such as the entertainment industry with theatres still shut.

His trip north of the border was greeted by the SNP’s Westminster leader Ian Blackford warning “thousands of people could lose their jobs unnecessarily”.

“Cutting the furlough scheme prematurely is a grave mistake. By removing this crucial support in the middle of a global pandemic, and withholding the financial powers Scotland needs for a strong recovery, the Tories are increasing the risk of mass redundancies,” he said.

With more than 6,500 jobs lost or put at risk just this week, Labour leader Keir Starmer has called for a targeted extension to prevent a “jobs crisis on a scale not seen for generations”.

The jobs retention scheme, however, is not the only programme aimed at boosting employment amid grim predictions for the economy.

The chancellor has set out a “plan for jobs” which includes measures to boost apprenticeships, stimulate eating out and a job retention bonus of £1,000 for every furloughed employee retained in January.