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Businesses on 'borrowed time'

Firms demand new support amid anger over ‘unfair’ deal

Andrew McRae

Andrew McRae: ‘borrowed time’

UPDATE APRIL 8: A new emergency grant and loan scheme is needed to help small businesses and the self-employed which have missed out on government support, according to the Federation of Small Businesses (FSB). 

In a letter to ministers, the FSB argues for further help for operators who are either excluded from existing support mechanisms or believe the help they’ve been offered is insufficient.

The FSB says home and vehicle-based firms are currently excluded from the Scottish coronavirus grant programme; that newly self-employed people do not benefit from the UK Government’s help for this group; and that some small Scottish chains are not being offered the same grant help as their counterparts south of the border.

Andrew McRae, FSB’s Scotland policy chairman, said: “Policymakers in Edinburgh and London know that many businesses are on borrowed time.

“It is clear that there are some in business not getting any help at all, and there are others for whom the help looks insufficient. That’s why we’re arguing for a new grant and loan support fund, which would allocate funding on a case-by-case basis.

Policymakers in Edinburgh and London know that many businesses are on borrowed time

– Andrew McRae

“Not every newly self-employed consultant, independent chain, or tradesman operating from their van, will need help. But for those that do, we’re urging the Scottish Government to fill that gap.”

The letter suggests that this new scheme could be funded from any underspend from the current Scottish grants programme. FSB further suggests that the Scottish Government may wish to make a request to Treasury if new finance is required. 

In addition, the campaign group argues for Ministers to redirect existing public sectors business loan schemes toward helping firms through the coronavirus crisis. The FSB notes that the Welsh Government recently launched a £500m Economic Resilience Fund. 

Petition demands equal treatment

Businesses are demanding the Scottish Government matches the business grant scheme on offer in England and Wales.

Small businesses south of the border are receiving £25,000 for every qualifying property they have with a rateable value between £18,000 and £51,000.

Firms in Scotland have accused the Scottish Government of reneging on a pledge made on 18 March to fully replicate this scheme.

Ministers repeatedly said the Scottish grant would also be available to properties. But they have now stated that the grant will be available to each business.

Some firms have made decisions, including laying off staff on the understanding that grants are available for each property they own.

Two small business leaders have raised a petition which has received almost 1,000 signatures and have threatened to take the matter to judicial review.

Mr McRae said: “The Scottish Government should look at all of the resources at their disposal to provide additional help for operators that need it. That might mean redirecting cash from other initiatives, or working with Treasury to get money to the real economy. 

“While many in business are immensely relieved at the help in the pipeline, it isn’t fair that some feel forgotten. Ministers in Edinburgh have an opportunity to provide a new safety net.” 

David Lonsdale

David Lonsdale: ‘firms in unenviable position’ (pic: Terry Murden)

David Lonsdale, director of the Scottish Retail Consortium, said: “Many retailers took decisions – on store closures, staffing, and managing cash flow – in light of the announcements of financial support on offer from the UK and Scottish governments.

“Unfortunately the impression many took away from the announcement of this grant scheme was that it would be on a per store basis, rather than per company.

“These firms – which sustain hundreds of jobs across Scotland directly – now find themselves in the unenviable position of having to think afresh about the cash flow challenges they face.

“That challenge has now become immeasurably more difficult at the very time when they have had to shut their shops.”

Finance Secretary Kate Forbes said the Scottish government was offering other support to businesses not available south of the border.

“Because there are more businesses eligible for the £10,000 grant in Scotland due to the more generous Small Business Bonus Scheme, and recognising the other business support available to cover wages, we have taken the decision to limit the £10,000 and £25,000 grants to one per business.

““This has allowed us to offer support to other important sectors, including creative industries, aviation and fishing, which are not receiving support elsewhere in the UK.

“As such, parity with other nations could require us to strip those sectors of support, which could arguably cause even greater hardship.

“The hospitality industry was the first to receive government support and has benefited from grants and rates relief, when some other badly-hit sectors have not.

Nicole Bernard

Nicole Bernard: ‘completely unreasonable’

Business owners such as Becky Woodhouse of Pure Spa & Beauty, Nicole Bernard, who owns The Wax Bar Group, and Jon Sharp of Kilimanjero coffee chain, say they are being penalised unfairly.

They have launched an online petition on that demands equal support for jobs and businesses all over Scotland which are now at risk. The petition has already received almost 1000 signatures. 

Mrs Bernard said: “A business like mine has multiple properties in Scotland but under the current arrangements, I’ll only receive assistance with one of them. It’s completely unreasonable when we are all doing our best to protect jobs.

“We are facing huge financial stress at a time of uncertainty so we need the Scottish Government to work with us. Instead, I feel a little betrayed that all the support being offered in England and Wales is not being extended to Scottish businesses.”  

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