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Forbes in grants u-turn over small firms support

Kate Forbes new

Kate Forbes: extending that scheme (pic: Terry Murden)

Scotland’s struggling small firms are to receive further funding as government ministers conceded they have been denied the same level of support as their counterparts south of the border.

Finance Secretary Kate Forbes has accepted a demand to offer grant support on every property – as applies in England and Wales – instead of to each business.

The government is providing £120 million to extend the Small Business Grant scheme to ensure that, in addition to a 100% grant on the first property, small business ratepayers will be eligible to a 75% grant on all subsequent properties.

Ms Forbes confirmed the £25,000 grants scheme is included and that the 75% grant applies to second and subsequent properties.

The new money is part of £220m of further grants being made available for businesses – including the recently self-employed – to help them deal with the ongoing impact of the coronavirus outbreak.

An additional £100m is also being made available to protect self-employed people and viable micro and SME businesses in distress due to COVID. This fund will be channelled through local authorities and enterprise agencies to target newly self-employed people and businesses who are ineligible for other Scottish Government or UK Government schemes.  

Applications for the £100 million fund will be open by the end of the month, and the new arrangements for the Small Business Grant will be in place to receive applications on 5 May.

First Minister Nicola Sturgeon told yesterday’s media briefing that Ms Forbes had updated the Cabinet on the situation and that there would be “further announcements”.

The government has insisted until now that its policy was superior to that on offer south of the border as it reached more businesses. SNP MSPs taunted their Tory counterparts over who would lose out if the scheme was to replicate the Westminster plan.

In a clear u-turn on its position, the Scottish government has now revised its policy and will offer small firms most of what they have been demanding.

In her briefing at lunchtime, Ms Sturgeon said the changes had been in response to concerns expressed by businesses.

“I hope it demonstrates our willingness to listen,” she said.

In a statement issued this morning, Ms Forbes said: “The Scottish Government’s primary concern remains protecting people’s health, but it is still the case that the Coronavirus (COVID-19) outbreak is having severe economic consequences for businesses around the country.

Our support for business now exceeds the £2.2 billion passed on from the UK Government

– Kate Forbes, Finance Secretary

“We are doing everything we can to support business at this difficult time and we continue to listen to and engage with the sector.

“Our support for business now exceeds the £2.2 billion passed on from the UK Government and actively works to fill the gaps in the UK schemes.

“Around 100,000 businesses in total are already eligible for our small business grants and from today we will be extending that scheme in response to feedback from businesses on the frontline of this economic crisis. 

“The creation of a £100m fund is to help those micro and SME businesses who face immediate cash flow challenges, are ineligible for other schemes and are the productive base for supporting employment in the future. 

“It will also support those newly self-employed people who are also ineligible for UK schemes and will be a vital lifeline for many businesses and individuals across Scotland.

“With UK Government support not being available until June, we are going further to secure the future economic viability of Scottish firms and applications will be open by the end of the month.

“While many businesses are in difficulty, some are doing better than others or can pull through from their own resources.

“Just as we ask the public only to buy what they need in the supermarkets, we are asking businesses who do not need this vital help to refrain from claiming additional support unless absolutely necessary so we can direct as much help as possible to those who need it most.”

David Lonsdale, Director of the Scottish Retail Consortium, said: “The economic response to the coronavirus challenge is both broad and complex. Governments have to take bold and unprecedented steps to protect businesses who otherwise may not survive – but of course there is a need to balance support to those who require it. 

“Today’s announcement is clearly in that spirit, and retailers will be pleased the Finance Secretary has listened to our representations.

David Lonsdale

David Lonsdale: ‘balanced support’ (pic: Terry Murden)

“Medium-sized Scottish non-food retail firms are amongst those most vulnerable to the consequences of lockdown and the collapse in footfall and spending.

“These businesses may operate from multiple sites, but each store is run on a individual basis and each store will need support in order to reopen when we move past this phase. 

“These grants, along with the generous but vital 100% business rates relief, are vital steps in ensuring when we eventually open our doors we can return to vibrant and successful high streets.”

Liz Cameron, chief executive of the Scottish Chambers of Commerce, said: “Today’s announcement is a positive step in the right direction which will give much-needed financial relief to many small businesses.

“We are also pleased to hear the Scottish Government is providing support to newly self-employed people not eligible for other schemes.

“Questions still remain on the criteria and speed of delivery and Ministers must provide businesses with reassurance that cash support will be released quickly. The harsh reality of this situation means any delays in support is the difference between a business going under or surviving.”

For those that were due to receive nothing this new help could be a lifeline

– Colin Borland, FSB

Colin Borland, the Federation of Small Businesses’ director of devolved nations, said: “This new Scottish Government package should plug some of the most obvious and dangerous gaps in coronavirus support for smaller firms and the self-employed. 

“For those that were due to receive nothing – like the new self-employed and some home-based and vehicle firms – this new help could be a lifeline. For others – like smaller chains – it could provide a critical top up to the money already in the pipeline. 

“This help looks more flexible than previous schemes, and Ministers in Edinburgh deserve credit for adjusting the help on offer.”

Colin Wilkinson, managing director of the Scottish Licensed Trade Association, said: “This additional funding still does not address the lack of support for properties with a rateable value greater than £51,000, many of whom are also in need of support.

“These grants are not a handout – it’s a survival payment, which every hospitality business needs right now.

“Are these businesses going to continually be ignored?”

Jackson Carlaw: Nicola Sturgeon finally realised her mistakes (pic: Terry Murden)

Scottish Conservative leader Jackson Carlaw said: “The SNP government has spent weeks defending its approach in the face of severe criticism from Scotland’s business community.

“Now, after pressure from the Scottish Conservatives, it has finally accepted its failings.

“These changes should have been made sooner, and that would have spared a significant amount of anxiety across Scotland’s small business community, among owners and their employees.

“We’ve always argued that if the SNP takes a divergent approach from the rest of the UK, it has to show why this is of benefit for Scotland.

“Nicola Sturgeon wasn’t able to do so in this case, and I’m glad she’s finally realised her mistakes in this critical issue.”

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