Crisis package for business
Shops, pubs and restaurants get virus rates relief
Kate Forbes: help for business (pic: Terry Murden)
UPDATED 15 MARCH: Scotland’s retailers and businesses in the hospitality and leisure sectors will see their rates cut to help them cope with the devastating coronavirus.
Scottish Finance Secretary Kate Forbes will also offer a range of grants as part of a £320 million package of support for those businesses hardest hit by the outbreak.
The funding will come from the extra money provided by Chancellor Rishi Sunak in last week’s Budget.
Ms Forbes’ package of support includes:
– a 75% rates relief for retail, hospitality and leisure sectors with a rateable value of less than £69,000 from 1 April
– an £80 million fund to provide grants of at least £3,000 to small businesses in sectors facing the worst economic impact of COVID-19
– 1.6% rates relief for all properties across Scotland, effectively reversing the planned below inflation uplift in the poundage from 1 April
– a fixed rates relief of up to £5,000 for all pubs with a rateable value of less than £100,000 from 1 April
The Finance Secretary will also write to all local authorities urging them to respond positively to requests from rate payers for payment deferrals for a fixed period.
The support for business comes as ten more people in the UK have died in the last 24 hours after testing positive, bringing the total number of deaths to 21. There have been 121 confirmed cases in Scotland, 60 in Wales and 34 in Northern Ireland.
The US has also extended the travel ban to the UK from Monday and Jet2 has cancelled all flights to Spain, the Balearic Islands and the Canary Islands.
Travel company Tui has cancelled all holidays in Spain which were due to start between 14 and 16 March.
Confirmed cases in Spain have risen by 1,500 in 24 hours and thousands of people have been placed in lockdown. The country’s death toll has reached 120 and it is set to enter a two-week state of emergency.
Ms Forbes said: “COVID-19 will have challenging implications for businesses and the economy over the coming weeks and months.
“As well as following the latest health and travel advice, it’s also crucial we consider the latest economic analysis and listen carefully to what the business community is telling us.
“We know that the tourism and hospitality sectors are facing immediate pressure, which is why we have directed support to them in particular.
“All rate-payers will benefit from a relief that effectively reverses the planned inflationary uplift in the poundage that was due to come into effect in April.
“The measures I’m announcing today will provide £320 million of assistance to Scottish business and ensures that all Non Domestic Rate consequentials we expect to receive from the UK Government associated with the COVID-19 outbreak will be used to provide Scottish business with support through what is likely to be a difficult time.
We will be making the case to the UK Government for more resources– Kate Forbes, Finance Secretary
“We will also be making the case to the UK Government that, because of the larger number of small businesses in Scotland, we need additional resources to be able to provide further support.
“Businesses receiving support are being encouraged to operate with fair work principles including supporting staff to self-isolate when they need to and if they have caring responsibilities and to consider keeping staff in employment where at all possible.
“We continue to work closely with our partners to identify what further support is needed and I’d encourage any businesses with questions relating to the impact of COVID-19 to contact the helpline we launched this week.”
Tracy Black: ‘substantive steps’ (pic: Terry Murden)
The Fraser of Allander Institute said the virus would have a “significant impact” on the Scottish economy and urged consumers to help businesses get through the crisis.
In a statement, it said: “Much of the support is – quite rightly – targeted at the sectors in the front-line (such as retail and hospitality).
“But the nature of the situation faced is that there will be externalities everywhere. And with some businesses facing a near complete shutdown of demand for a period of time, it remains to be seen if these measures will be enough.
“With this in mind, there will be an important onus not just on policymakers, but all of us as consumers, to play a role in supporting such businesses through tough times. Shopping locally, visiting local restaurants and supporting our local tourism industry will all make a difference.”
Tracy Black, CBI Scotland director, said: “These are substantive steps from the Scottish Government that will be hugely welcomed by business. Sector-specific support is vital in hospitality, leisure and retail.
“Meanwhile the vast majority of businesses are doing all they can to support staff through tough times, including encouraging working from home where possible.”
Helen Dickinson chief executive of the British Retail Consortium, urged the UK Treasury “to follow Scotland’s lead by reversing yet another rise in the business rates burden this April.”
Scottish Retail Consortium director David Lonsdale said: “Scottish Ministers have acted swiftly to back businesses dealing with the immense challenges created by coronavirus.
“In dealing with this unprecedented scenario the Scottish Government has listened to business and has taken steps which should improve cashflow and confidence for those impacted by the virus.
“It’s positive to see government has listened to our call to back all businesses through a de facto cancellation of next month’s non-domestic rates uplift, which will save Scottish retailers £10.3 million; as well as the ability to request deferrals in paying their rates bills.
David Lonsdale: ‘right decisions’ (pic: Terry Murden)
“That is a vital boost for high streets and shopkeepers. Similarly, it’s right small and medium sized businesses should receive further rates and grant support to help them through what is expected to be a very difficult few months.
“These fiscal measures come on the back of the Scottish Government moving to allow flexibility in opening and delivery hours for shops.
“In the face of this public health emergency, Scottish Ministers are taking vital steps to support businesses and the economy. These are the right decisions for the present, albeit both the UK and Scottish Government may have to take further steps as this very unpredictable and unprecedented situation evolves.”
Andrew McRae, FSB’s Scotland policy chairman said: “Businesses across Scotland will be pleased to see this new package from the Scottish Government. While the shape of this help is slightly different to the support being offered to businesses south of the border, it is a substantial attempt by Ministers in Edinburgh to help perfectly sound businesses facing severe short-term cash flow problems.
“Time is of the essence, so this new money must be easy to access. This is no time for bureaucratic hold ups. Further, should this initial package of measures prove insufficient, we must not hesitate in delivering a further expansion.”
Liz Cameron, chief executive of the Scottish Chambers of Commerce, said: “Many businesses are now redesigning their operating models – this is an additional, unplanned cost for many and they will require further support for this.’’