The First Minister called on the Treasury to extend the financial support for workers and businesses which currently supports 650,000 Scots. It comes as Unite Scotland said it was involved in redundancy consultations affecting more than 1,000 jobs at Edinburgh Airport, Scotland’s biggest transport hub.
Meanwhile, requests for advice on redundancy have soared by 100 per cent since February, Citizens Advice Scotland (CAS) said, with one in five employment queries now concerning redundancy.
But Boris Johnson insisted it was not “healthy” for either the economy or the employees concerned to maintain the scheme beyond its planned end date in October.
The scheme will start being scaled back from August with companies expected to pay a higher share of wages while the UK government continues to subsidise 60 percent of salaries up to cap of £2,500 a month.
But Ms Sturgeon called for an extension of Treasury Support stresing support was needed to address Scotland’s “economic crisis”.
Ms Sturgeon added: “I have previously welcomed the UK Government’s interventions, especially the furlough scheme which has helped to preserve jobs during this period.
“But in my view it is now time to signal a further extension of Treasury support.”
“The alternative to extended support being put in place is either that businesses are forced to reopen before it is safe to do so, and of course could damage health and it could cost lives, or businesses will have to take an even bigger hit and that will cost jobs.”
But Mr Johnson said: “I’ve got to be very, very blunt with you. We’ve spent £120 billion supporting people, it’s a huge commitment and we have put our arms around people.
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“The best way forward for us now is to work together to beat the virus and get the economy back on its feet. We’re going to do amazing things; we’re going to build, build, build, invest massively in our country.
“But I think people need to recognise the particular restrictions that furlough places on you are not, in the long term, healthy either for the economy or for you as an employee.
“You are keeping people in suspended animation. You are stopping them from actually working. I am being absolutely frank with you, we are pushing it out until October but in the end you have got to get the economy moving.”
It comes after a new report produced by Nicola Sturgeon’s administration calls for the UK Government to produce an £80 billion UK-wide stimulus package to boost the coronavirus-hit economy and cut inequalities.
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It calls for a furlough scheme extension, or some other form of wage subsidy, for the hardest-hit sectors, indicating while the unemployment rate could still reach 10 percent in Scotland in 2020, it could have peaked at 14 percent without the furlough scheme.
It urges the government to use the cash, equivalent to 4 percent of GDP, to finance a range of actions, including cutting VAT to 15 percent for six months once lockdown ends, with a reduction to 5 percent for the hospitality sector.
Further recommendations in the Scottish Government report include cutting employers’ National Insurance contributions by 2p to reduce the cost of hiring staff.
Finance Secretary Kate Forbes also requested for more financial powers from the Treasury last week.
The MSP said the government needs to borrow up to £500 million more to deal with the impact of coronavirus, as well as having greater flexibility over its capital budget.
She warns there was a £500million hole between the extra cost of the COVID-19 pandemic and the funding given to Scotland from Westminster.
Ms Forbes added: “This is one of the most significant economic crises of our generation and we desperately need the powers and the investment to reboot it.”