U.K. ‘Open-Minded’ About Extending Pandemic Furlough, Gove Says

(Bloomberg) -- The U.K. government is “open-minded” about extending its pandemic furlough program, Cabinet Office minister Michael Gove said ahead of a meeting with Scotland’s Nicola Sturgeon, who wants the wage support policy to run beyond its current September expiry date.

During the Covid-19 outbreak, the U.K. has funded employers to keep staff on their books, with the government underwriting as much as 80% of the wage bill. The program’s scale surprised economists, supporting 11.5 million jobs at various times during the pandemic and preventing mass unemployment.

According to her office, Scotland’s First Minister will use a four-nation summit with Prime Minister Boris Johnson, Chancellor of the Exchequer Rishi Sunak and Gove on Thursday to argue that Scottish jobs are at risk if the program is ended prematurely. According to the Office for National Statistics, furlough had cost the U.K. 63.3 billion pounds ($90 billion) as of the end of April.

‘Extra Funding’

“We are open-minded, yes,” Gove told BBC Scotland radio, when asked about the program. “Extra funding for everyone will continue, and it is important we all learn from each other about how that money should be spent.”

Sturgeon’s request comes at a sensitive time, juggling the push for more funds from London at a time she’s pushing the case for Scottish independence. Meanwhile Johnson is highlighting the support it has offered Edinburgh during the pandemic as an argument against a new referendum.

Thursday’s virtual meeting, which includes leaders from Wales and Northen Ireland, was postponed last week after Sturgeon and Welsh First Minister Mark Drakeford pulled out, demanding Johnson engage in “meaningful discussion with substantive outcomes.”

According to the U.K. tax agency, 3.4 million jobs were furloughed at the end of April, down from 4.3 million at the end of March. In Scotland, almost 270,000 jobs were furloughed as of the end of April, about 8% of the U.K. total.

Pandemic restrictions are gradually being lifted across the U.K., with infection rates far below previous peaks that prompted lockdowns.

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