Business chiefs warn of wave of redundancies across Scotland when furlough scheme ends

There is “no doubt” that there will be a huge wave of redundancies across Scotland once the furlough scheme ends, business leaders have warned.

Liz Cameron, the chief executive of the Scottish Chambers of Commerce, said on Tuesday that while data suggests that fewer than one in ten Scottish firms had let workers go so far, many more were planning to do so once the furlough scheme winds up in October.

She told MSPs on Holyrood’s economy committee that as yet unpublished data obtained through a survey of businesses found that between 35 and 40 per cent said they would struggle to bring all  furloughed workers back and were currently planning redundancy offers.

Her comments came as new unemployment figures, published on  Tuesday, showed the number of people in work in Scotland fell by 15,000 between April and June as the impact of lockdown hit.

Dr Cameron said: “There is no doubt in our mind, driven by business intelligence data, that the furlough scheme has masked, and is continuing to mask, really high numbers of redundancies and individuals losing their jobs.

“There is no doubt in our mind about that. We are going to see a lot of redundancies coming our way in the next few months.”

The official employment figures from the Office for National Statistics showed that the proportion of people aged 16 to 64 in employment north of the border fell between April and June to 74.3 per cent (2.651 million).

The unemployment rate rose over that period to 4.5 per cent, up from 4.1 per cent in the previous quarter, meaning 124,000 people are out of work. This was higher than the UK unemployment rate of 3.9 per cent.

Nicola Sturgeon said: "All of these figures demonstrate again that, despite the UK Government's Job Retention Scheme and the support that the Scottish Government is providing to business, the public health crisis of Covid is creating a very significant economic crisis."

She added that the "best way" to ensure that the economy recovers is to ensure the suppression and elimination of the virus.

The First Minister has repeatedly called for the furlough scheme to be extended beyond October.

However, during a visit to Scotland last week, that was ruled out by Rishi Sunak, the Chancellor, who said it would have been in place for eight months by the time it ends.

He said: “People not being attached to a work place is not good for their long term prospects. So, if it’s not going to be the case that that job is going to be there, we are better off providing new opportunities and different types of support for those people, which is what we did in the plan for jobs earlier.”