Scottish business groups write to First Minister with request for ‘extraordinary’ package of funding in response to announcement of new restrictions
Rt Hon Nicola Sturgeon MSP
First Minister of Scotland
The Scottish Government
St Andrew’s House
Regent Road
Edinburgh
EH1 3DG
20 December 2020
CC by email:
Fergus Ewing, Cabinet Secretary for Rural Economy and Tourism
Kate Forbes, Cabinet Secretary for Finance
Fiona Hyslop, Cabinet Secretary for Economy, Fair Work and Culture
Dear First Minister
Like everyone in the country, Scotland’s tourism and hospitality industry is alarmed at the news that a new variant of Covid-19 has been discovered within the UK and is presenting a heightened level of threat to us all and the government’s strategy to control the virus.
Your subsequent announcement that restrictions will be tightened for the foreseeable future is clear and understood and is a decisive response to the health risk. The ask of the industry is that the Scottish Government now delivers a similarly swift and committed response to the economic consequences of this action.
An additional upweighted ‘extraordinary’ package of funding must urgently be identified from within the Scottish and UK budgets to support both our frontline businesses and the supply chains over what will now be a significantly more challenging period than any of us had previously understood or anticipated.
Our sector awaits further details of the Scottish Government’s £185m additional funding support announced last week which I believe will be released by the Finance Minister tomorrow. However, my understanding and concern is that due to the challenges on resources to set in place the application process and for applications to be made – that once approved – funds will not likely begin to flow into businesses bank accounts until late February.
Furthermore I am aware that these additional support packages are primarily targeted at businesses that have to date received little or no support at all and in some cases the grant amount available to certain business types is very limited; some will also be precluded from applying.
There will be businesses who fall into the latter category who had planned to be open and trading in the days and weeks ahead who will now be further significantly financially impacted by these new restrictions coming into force on Boxing Day and also in need of greater financial help.
I know of one private hotel business which was staying open and will now incur additional direct losses of £600k which they will have to absorb as a result of the restrictions announced yesterday.
Without a more equitable and upweighted level of support being made available quickly, it is likely that many more businesses will be forced into temporary or permanent closure; operators are now dealing with a flood of cancellations and have lost much needed revenue as a result of yesterday’s announcement. With no opportunity to trade viably over the coming weeks and potentially months, there is a need for an even greater level of financial support to save businesses and jobs including those in the supply chain and the livelihoods of many in the local communities that the industry supports.
The scale of job loss will be grave without there being longer term financial support for business; several operators who had seen a window of opportunity to trade over Christmas and into the New Year (especially those in tiers 1 and 2) have taken on new employees post 31st October.
Under the current furlough arrangements, they are now faced with not being able to place these employees onto furlough and I would ask and urge that the Scottish Government press the Chancellor for a change to the existing furlough cut off dates to protect those that now face being made redundant.
The tourism and hospitality sector is a major economic driver and offers Scotland a strong route to recovery. It is therefore absolutely vital that both governments protect businesses at the front line of our sector and the supply chains that support them. Capacity must be sustained to ensure the sector can contribute positively to Scotland’s economy through recovery and maintain the nation’s position on the global stage.
Sadly, much of the industry is already decimated with many in the sector looking at only the slimmest chance of recovery over the coming months, without much stronger, upweighted levels of targeted support coming from both the Scottish and UK governments. Unless this is at similar levels to those being committed by other governments in Europe, the sector will not be able to return to a state of stability nor will it be able to start contributing positively to the nation’s economic recovery. What is equally worrying is that I can only see increases in the poor mental health of many who work in our industry.
The industry fully acknowledges that we have now moved to a critical point in fighting the virus and that we face unforeseen challenges that require decisive action to be taken to control the spread of this new, highly infectious strain. The STA will, as it always has done, continue to be fully supportive of the right measures being put in place to protect public health in the short and longer term but this must be balanced with supportive policy and swift action to protect the needs of the economy.
The scale of damage and devastation to businesses, local economies, communities and livelihoods will be unprecedented without immediate, more meaningful, targeted and robust support from both governments. I would urge you and your Cabinet colleagues to dig deeper into the monies already at your disposal and to allocate them sooner in addition to pressing the UK Government much harder for the additional financial support which is so urgently needed by Scotland’s business community.
The co-signatories below fully support the views and asks that I have set out above.
Yours sincerely
Marc Crothall
Chief Executive – Scottish Tourism Alliance
cc Willie MacLeod – Executive Director UKHospitality (Scotland)
cc James Withers – CEO, Scotland Food & Drink
cc Liz Cameron – CEO, Scottish Chambers of Commerce
