Extending Coronavirus Job Retention Scheme by eight months could reduce unemployment in Scotland by more than 60,000, says Scottish Government

New research also finds that wider economic benefits from extension mean that 'it could pay for itself'

Extending the Coronavirus Job Retention Scheme (CJRS) by eight months could reduce unemployment in Scotland by more than 60,000 through the first half of 2021, according to new research from the Scottish Government.

In COVID-19: Analysis of Extending the Coronavirus Job Retention Scheme, published today, the Scottish Government explores the costs and benefits of extending the CJRS which is due to end on 31 October 2020.

The report's key findings include that -

• extending the CJRS on a temporary basis for eight months could reduce unemployment in Scotland by 61,000 through the first half of next year;
• the direct cost of extending the CJRS for eight months for Scotland is estimated to be around £850 million;
• even a temporary extension of the CJRS would have a persistent, positive impact on the labour market, preventing unnecessarily higher levels of unemployment over the next few years;
• wider economic benefits from an extension mean that it could pay for itself, increasing GDP and potentially lowering debt as a share of GDP; and
• with COVID-19 cases on the rise, it may prove impossible for certain sectors to resume economic activity in a way that is economically viable before the current employment support schemes are due to expire in October 2020 - many of these businesses will have a viable long-term future, but only if they continue to be supported.

Commenting on the report, Economy Secretary Fiona Hyslop said -

'The UK Government must think again about withdrawing blanket support and they must urgently implement some form of extension which would continue to provide help for the sectors that have been most heavily affected.

Extending the Job Retention Scheme for eight months would save 61,000 jobs in Scotland and help secure a stronger economic recovery from coronavirus (COVID-19). Unlike the Scottish Government, the UK Government has the borrowing powers necessary to fund the extension of the Job Retention Scheme and they must act now to protect jobs and livelihoods.'

For more information, see Impact of furlough from gov.scot