Boris Johnson is risking “another winter of discontent” unless the furlough scheme is extended, MPs have heard.
The scheme, rolled out in March, is due to finish providing support to around nine million workers at the end of next month.
Fearful of mass unemployment, business leaders, charities and the Bank of England called on the UK Government to extend the scheme while strict Covid rules remain in place.
In the Commons, the prime minister pledged to go forward with “further creative and imaginative schemes to keep our economy moving” – but that was dismissed as “poor” by SNP Westminster leader Ian Blackford.
Mr Blackford said there were a million jobs at risk in Scotland if the furlough scheme, which is controlled by the UK Treasury, came to an end.
“If those numbers become a reality the prime minister is leading us into another winter of discontent,” he said.
He added: “Our first minister has shown leadership on all fronts during this pandemic. However, the responsibility and power for extending the furlough scheme lie with the prime minister and the chancellor.
“The prime minister must announce an immediate extension, no half-measures, no half-baked projects, to this vital and life-saving scheme. Will the prime minister show the leadership required and save the jobs?”
Mr Johnson responded: “I notice that both Mr Blackford and Sir Keir Starmer now support an indefinite extension of the furlough scheme
“What we will do, as I’ve said throughout, is continue to put our arms around the people of this country going through a very tough time and come up with the appropriate, creative and imaginative schemes to keep them in work and keep the economy moving.”
Mr Blackford hit back: “I can tell you the last thing those 61,000 Scots are looking for is a hug from you.
“They need the security of knowing that they can hold on to their jobs and incomes, for themselves and their families,” he said.
Mr Johnson responded: “I can imagine that Mr Blackford doesn’t want a hug from me, but that was a metaphor, perhaps it’s physically incarnated by the £12.7 billion of Barnett consequentials that we’re seeing come from the UK Exchequer to support people across the whole of our country.”
The comments come amid reports Chancellor Rishi Sunak is weighing up plans to replace the furlough scheme with German-style wage subsidies as part of a wider emergency support package to help businesses through a second wave of Covid-19.
One option believed to be under consideration is a scheme similar to the German Kurzarbeit (“short work”) system, which would involve the government paying the wages of workers for short-time working.