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Schools face FIVE months break...

Scots businesses handed £1.9bn boost to fight virus

Fiona Hyslop speaking

Fiona Hyslop: warned that economy faced collapse

Scottish businesses will be supported by a £1.9 billion pot from the UK Government to help them tackle the deadly coronavirus outbreak, while schools will close for up to five months.

The Scottish Government is delaying the introduction of the deposit return scheme and the tourist tax to ease pressure on businesses.

It has also confirmed there will be no second independence referendum this year as efforts are focused on tackling the coronavirus.

In a letter to the UK Government, Constitution Secretary Mike Russell said ministers had halted work on the plans as a result of the pandemic. Plans to ask the Electoral Commission to test a possible referendum question had also been shelved.

The latest injection of cash takes the total of support for the Scottish Government from the UK Government to £2.7 billion.

Economy Secretary Fiona Hyslop told MSPs that as a result of coronavirus, the Scottish economy is facing “an immediate collapse in demand”.

She outlined the actions being taken by the Scottish Government to support businesses including a package of measures from 1 April:

  • a full year’s 100% non-domestic rates relief for retail, hospitality and tourism
  • £10,000 grants for small businesses in receipt of the Small Business Bonus Scheme or Rural Relief
  • £25,000 grants for hospitality, leisure and retail properties with a rateable value between £18,000 and £51,000
  • 1.6% relief for all properties, effectively freezing the poundage rate next year
  • First Minister to convene an emergency meeting of the Financial Services Advisory Board
  • urging local authorities to relax planning rules to allow pubs and restaurants to operate temporarily as takeaways
  • extending the go live date for the deposit return scheme to July 2022
  • halting the introduction of the Visitor Levy Bill

Ms Hyslop said: “The overall economic impact is clearly likely to be significant, though the scale and duration of the impact are difficult to predict.

The Scottish Government will pass all consequentials to businesses

– Fiona Hyslop, Economy Secretary

“Depressed economic activity this year will have implications for the public finances through lower tax receipts and higher welfare spending.

“This will have severe economic consequences and we are treating it as an economic emergency, triggered by the enormity of the health emergency.

“I welcome the further support announced by the Chancellor and the Scottish Government will pass all consequentials to businesses to help them through this challenging period.

“We have already confirmed our intention to effectively the freeze the poundage rate next year and I can confirm that we will mirror those measures with a package of reliefs and grants worth £2.2 billion.”

There will be 12 months of full relief from business rates for retailers and hospitality. 

The deal adds to the Chancellor’s announcement of three-month mortgage holidays, funding for research and extended Statutory Sick Pay. Prime Minister Boris Johnson has also announced further help for renters.

First Minister Nicola Sturgeon has confirmed that schools and nurseries will close at the end of the week – adding pressure on working parents. Pupils will now be off school probably until the end of June and then for the summer holidays, a total of five months.

The government has no authority over private nurseries but has appealed to them to follow the guidelines.

Andrew McRae, the Federation of Small Business’s Scotland policy chairman, said: “The crucial thing now, though, is to get this support to the front line as quickly as possible. We can’t see perfectly good businesses going to the wall – taking jobs and future tax revenues with them – because of temporary, if acute, cash-flow problems.”

On school closures, he said: “Ministers are right to be led by clinical advice and parents won’t be hugely surprised at this move.  However, the closure of Scottish schools and nurseries will put additional pressure on many workers and their employers.”

David Lonsdale, Director of the Scottish Retail Consortium, said: “Scottish Ministers have once again moved with commendable speed to back businesses dealing with the immense challenges created by coronavirus.

“Removing the burden of business rates from retailers for the next twelve months represents a vital shot in the arm for a sector facing enormous uncertainty.

“Ministers have clearly listened and this big, bold move will provide a cashflow and confidence boost for the industry at a time when coronavirus is casting a shadow over the economy.”

Scottish Secretary Alister Jack said: “The Chancellor has set out a comprehensive package of support to make sure Scottish businesses are in as good a position as possible to weather the economic storm of COVID-19.

Alister Jack

Alister Jack: comprehensive package

“That includes an extra £1.9 billion cash boost for Scotland, on top of that already announced in the Budget, bring the extra Scottish COVID-19 funding to £2.7 billion. It is on top of a raft of UK-wide measures such as mortgage holidays and loan guarantees.

“I welcome Nicola Sturgeon’s clear commitment to pass on every penny of this extra funding to support Scottish businesses. Scotland’s two governments are working closely together on a daily, indeed hourly, basis. It is vital that we work together right across the UK.

“We are undoubtedly facing incredibly difficult times. But the UK Government is doing everything possible to support individuals, businesses and communities. I know all of us will also be doing what we can to support friends and neighbours. Together, we will get through this.”

Earlier, official figures showed Scotland’s GDP grew by 0.2% in real terms during the fourth quarter of 2019, covering the period October to December. The UK quarterly GDP remained flat at 0%.

The announcement came as a third death was reported in Scotland.

Macklin donates cash

Entrepreneur Marie Macklin has donated £100,000 as part of a package of support for people in the Kilmarnock area affected by the coronavirus pandemic.

The founder and executive chairman of the HALO Urban Regeneration Company is making the cash available to help elderly and vulnerable people and to support small businesses in her home town and East Ayrshire.

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