ALMOST two million self-employed workers face the loss of their livelihoods as a result of the coronavirus pandemic, Boris Johnson was told yesterday, as a report warned the UK and Scottish economies could take many years to recover.

At the final Prime Minister’s Questions before Parliament shut down last night, the SNP’s Westminster leader Ian Blackford told Johnson that more than 1.7 million people – including 320,000 in Scotland – were at risk of losing their incomes.

“Last Friday, the Prime Minister and his Chancellor promised the self-employed that help was coming,” Blackford said. “These are the same promises that have been made for weeks now, yet they, and we, are still waiting.”

Johnson promised plans would be in place to support the self-employed but declined to give any detail.

Meanwhile, the Fraser of Allander Institute (FAI) warned that rural communities are particularly exposed and the economy could take years to recover. Its director, Professor Graeme Roy, said the “large-scale mothballing of our economy in response to the public health emergency is unlike anything we have seen since World War Two”.

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He said: “Businesses and policymakers always knew a global pandemic represented a major risk to our highly integrated global economy. But the pace at which this crisis has escalated has caught many off guard.”

Roy added: “Assuming that the public health emergency will pass in the coming months, the hope of many is that the economy should come out the other side with only a limited hit to its long-term productive capacity.

The National:

“But this is looking increasingly overly optimistic. The scale of the shutdown in our economy is so large it will take months, if not years, to recover.”

A second report called for the Scottish and Welsh Governments to be given greater borrowing powers.

The Institute for Fiscal Studies said ministers in both Edinburgh and Cardiff could find their ability to respond to the pandemic “delayed or compromised” by the current funding arrangements.

The paper suggested the devolved administrations are “very reliant” on cash from the UK Government to pay for new measures being brought in as part of the response to the virus.

It said the current set-up, where the devolved governments receive a proportion of cash spent in England under the Barnett formula, combined with “limited” reserves held in Scotland and Wales, meant “the funding arrangements ... may not be appropriate for the task at hand”.

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IFS associate director David Phillips said: “Devolved governments have limited reserves, constrained borrowing powers, and the funding flowing to them as a result of the Barnett formula won’t reflect the challenges that they face.

“As a result, the devolved governments’ ability to respond effectively may be delayed or compromised and vital funding misallocated across the UK.”

Phillips added: “There is a case to give them access to greater borrowing powers and to consider bypassing the Barnett formula – at least for now.”

The paper noted that the Scottish Government is permitted to take a maximum of £250 million a year from reserves for day-to day spending, with a further £100m a year permitted to boost capital spending.

But the IFS said: “In the coming financial year (2020-21), forecasts suggest there could be around £100m of unallocated reserves that could be drawn down, which might sound sizeable but is less than 0.3% of the Scottish Government’s budget and less than 1% of the Scottish NHS’s budget.”