Large Business Owner Operators Round Table with Fergus Ewing

The STA co-ordinated the above meeting which was held over a near two-hour call this morning with 20 representatives from larger tourism and hospitality businesses around Scotland.

Introduction by the Cabinet Secretary

The Cabinet Secretary began by emphasising that the main objective of government is to minimise the loss of life; the whole approach that is being taken by the Scottish Government is to deliver that overriding objective.  The subsidiary objective is to prevent what is happening in other European countries where their healthcare systems are swamped.

Mr Ewing acknowledged the swiftness of support from the UK Government and the Scottish Government for the tourism and hospitality sector, the first and second wave, but appreciates that more information is needed and much of this is a UK matter.  The Cabinet Secretary met with Nigel Huddlestone MP along with NI and Welsh counterparts before lockdown and had a productive discussion at the onset of the crisis.  They had a follow up call yesterday and have agreed to speak fortnightly.

Mr Ewing stressed on his call with UK Government yesterday that the industry needs cashflow and it needs it now.  The details of the wage protection scheme must be given as soon as possible and be as clear as possible.  Calculations should be representative of the seasonal nature of tourism. Scottish Government have suggested that annualised methods of calculation are used.  There have been a whole range of very sensible questions put forward by businesses within our industry and these are being relayed verbatim to offer a clear understanding of the impact of policy decisions at ground level.

Mr Ewing made it clear that the Scottish Government has sought to put politics to one side and that remains the case in relation to UK Government and cross parties.

The purpose of the call from the Cabinet Secretary’s perspective was to hear specific concerns which can be taken forward and dealt with in collaboration with the STA, on a daily basis.

Marc Crothall who chaired the meeting invited every participant to make their contributions which were varied and welcomed by the Cabinet Secretary.

All those who contributed offered typical stories which we are receiving on a daily basis from others within the industry and are by no means isolated, ranging from total collapse of business, concerns regarding future security of both physical assets and long term position with all wanting to do the very best by their staff

Key issues raised on the call

• There is need for flexibility in relation to furloughed staff. Many businesses require some staff presence in ‘closed’ premises for maintenance, security, IT, not least to meet insurance requirements, protect the building and contents and potentially provide accommodation for key workers
• The shortcomings of the Coronovirus Business Interruption Loan were discussed by the majority of businesses around the table and the failure of the scheme to provide financial support and liquidity. Al stressed that banks need a bigger push.
• Insurance – continuing concerns over the behaviour of insurance companies in relation to business interruption cover.
• Regulation and the ask that forthcoming regulation is cancelled or delayed, such as the Deposit Return Scheme, TVL (but permanently?), Food Standards Scotland Out of Home policy, Tied Pub Code Bill.

• There was an ask for the deferral or cancellation of the Apprenticeship Levy
• An ask for the inclusion to the business rates holiday of breweries and conference centres
• The issue of the behaviour of OTAs, in particular Booking.com and the serious impact on cash flow of accommodation providers.
• The impacts on supply chain to businesses.
• Scottish Government is likely to address deferral of rent payments and risk of lease forfeiture in emergency legislation next week.
• The issue of continuing licence payments to PRS/PPL and impact on cash flow was also raised.

Outcome of the call

The Cabinet Secretary has a deep understanding and support for our tourism industry and this call offered stark detail of the severity of the impact of the coronavirus crisis on our industry.

Mr Ewing said that the solution is not complicated in principle:

“Normally business bankrolls government; now is the time for government to bankroll business at least for a period … with care not to over-compensate.”

He emphasised that it is very important that governments get the support package correct and acknowledged that the furlough scheme has to be flexible.  Mr Ewing emphasised that recovery will be long and we will not return to where we were but hoped that in the coming weeks we would see greater precision in the modelling in relation to the virus stats which would offer a clearer outlook for the rebuild period.

Mr Ewing praised the work of the STA, commenting; “The STA has been the foremost lobbying trade body in Scotland – I am not aware of any body that has more effectively marshalled these conversations to take place and enabled factual response to be communicated to and recorded by Scottish Government officials.”

He offered assurance that a detailed note of the meeting would be conveyed to Cabinet colleagues so that discussions can be informed by the real-world conversation and that the points raised today would be discussed with Cabinet at an economic meeting tomorrow.

The Cabinet Secretary ended with the following statement for industry;

“Thank you to all of you for what you’re doing and the support you’re giving your staff.  On the other side you will need them.  We need to look beyond the battle. We will overcome this and the Scottish Government will support you.”

Organisations present on the call