Both the Scottish and UK Governments have, in the past two days, announced changes and updates to existing support packages to help businesses affected by the new COVID-19 restrictions. This is a fast-moving situation and we anticipate further changes coming when the Scottish Government announces further details of its tiered restrictions, but in the interim thought it would be helpful to summarise what we know so far.
COVID-19 Business Hardship Fund
- For businesses that may remain open but are directly impacted by the restrictions, the maximum hardship fund grant will increase to £2,155.
- All grants will be administered by local authorities. The increase will be automatic and businesses that have already applied for a grant will not have to re-apply.
- The upper limit for those applying for multiple premises has been increased to £14,000.
You can check eligibility and apply via the Highland Council (note that their page has not been updated with the new figures as of this email).
Job Support Scheme
- Employer contribution for unworked hours reduced from 33% to 5%, with Government contribution increasing to 61.67% (to a maximum of £1541.75 per month)
- Minimum working hours requirement for employees reduced from 33% to 20%
Further details can be found in today’s announcement by the Chancellor.
Self-Employment Income Support Scheme
- The amount of profits covered will increase from 20% to 40%, with the maximum grant increasing from £1,875 to £3,750
Details of the Self-Employment Income Support Scheme grant extension can be found on GOV.UK.
We understand that Scottish Government will be introducing a new system of business support to complement their new “levels” approach to localised restrictions. As soon as we have details of this and what will be available to Chamber members, we will let you know.
On the announcement by the UK Chancellor Rishi Sunak of changes to the UK Government’s business support package to support businesses affected by health restrictions, Dr Liz Cameron, Chief Executive of the Scottish Chambers of Commerce, said:
“The UK Chancellor’s new business grant and job support scheme extension will be absolutely necessary to the survival of many businesses as Covid-19 restrictions are set to be in place indefinitely. The boost to the self-employed grant will be welcomed by many who have been at risk of not receiving the support that they need.
“Chambers of Commerce in Scotland & the UK have been campaigning for greater support for businesses experiencing big falls in demand as a result of new restrictions, and a number of the steps announced today, including the lowering of employer contributions and the number of hours worked needed to qualify for the jobs support scheme, respond directly to our calls.
“As the Scottish Government is set to confirm its own approach to a tiered system of restrictions, it is essential that consequential funding is delivered to where it is needed most to save jobs. This must also be tied to every stage of restriction as a matter of course and not in incremental, repeated tweaks.
“It is clear that this winter will be extremely difficult for employers, their employees and a sustained approach to jobs support into 2021 is critical.’’
On the announcement by the Scottish Government that current restrictions on the hospitality sector will be extended for at least another week, Dr Liz Cameron, Chief Executive of the Scottish Chambers of Commerce, said:
“Businesses in the hospitality sector and across the supply chain will be absolutely devastated that restrictions now look to be in place indefinitely. We were advised that temporary restrictions would help to reduce spread of the virus. But now the temporary restrictions have been extended which make it impossible for businesses to rebuild and protect jobs.
“This short term, reactive approach is no longer enough. Where is the plan that we can all get alongside to help Scottish Government to both manage the virus and ensure the economy can also return to health?
“A new, tiered system of restrictions is set to be introduced this week. However, along with this there must be a clear way out of higher tiered restriction levels, backed by data and in consultation with businesses. We need to be in those discussions now. The extension of the funding package will be essential and should be tied to every stage as a matter of course rather than a lagging afterthought.
“Governments need to focus on ramping up their test, track and trace programs. We have been living with this virus for seven months now. We should be able to deliver the capacity to provide test and protect in every business premises and in every airport in Scotland.
“The data shows that virus spread is reduced in the safe and controlled environments where employers have invested heavily to ensure they operate safely for the benefit of staff and customers. Managing this virus is also about encouraging safe behaviour of people whether they are on their lunch breaks or when they are outside of the work environment. That’s why every effort must be made to ensure guidance is as clear, easy to manage and follow as is possible with every restriction based on the most up to date data.”
Following the statement by the First Minister earlier today to Parliament where she outlined details on how and when businesses can access support from the new COVID-19 Restrictions Fund, Dr Liz Cameron, Chief Executive of the Scottish Chambers of Commerce said:
“As always, speed and cash out the door is critical if we are to have any chance of saving jobs. It will have been 10 days from when we were forced to close and send our employees home that this support will be available.
“To be clear, business environments are safe places. They should be allowed to trade while protecting staff and customers. If further restrictions are imposed then government must ensure that financial support is in place immediately and at the right level.
“Further details of how to apply for these funds have now been published and we urge those businesses who have been affected to apply as soon as application processes are open for the new funds.”
Stephen Sutherland, chairman of the Caithness Chamber of Commerce board, looks at what has been achieved in the past year and what lies ahead
Earlier this month we welcomed businesses from across the North Highlands to our thirteenth Annual General Meeting. As with so many events this year, COVID restrictions meant that this had to be held virtually, but despite the challenges we had a fantastic turnout.
Hosting our AGM has given me a chance to pause and reflect on some of what the Chamber has achieved this past year, as well as some of the many challenges still facing us and the wider business community across the North Highlands.
As with every business, it is impossible for us to look back at our year and not see the huge impact that COVID-19 has had on our operations. We have had to manage the challenges that come with home working and significant upheaval to our plans for the year, while facing a heavier workload than ever before assisting the business community through this difficult time.
We have had some significant successes, despite the challenges. Our ongoing efforts to get up-to-date information, guidance and details of support out to our members and the wider business community have been commended by many. The flow of information has not been one way, and through our close working relationship with the Highland Council and Scottish Chambers of Commerce, we were able to flag up some early concerns with support mechanisms and secure key changes or additional support.
Through our management of the Caithness Business Fund, we were also able to secure and disburse £200,000 of funding (thanks to support from Dounreay Site Restoration Ltd and the Nuclear Decommissioning Authority) to businesses across the North Highlands in a short space of time. This has made a huge difference to many businesses at a time when support was most needed. Thanks to the support of Dounreay Site Restoration Ltd, we’ve also been able to expand our business mentoring and support to cover any business in the region affected by COVID-19.
Looking beyond COVID, the year has brought other successes for the Chamber. We’ve continued to grow our membership, seen previous lobbying efforts pay off with the completion of works on the Berriedale Braes, and stepped up our campaign for a PSO from Wick John O’Groats Airport with partners.
Looking towards the remainder of 2020 and the start of 2021, it can be easy to feel overwhelmed by the scale of the challenges we have yet to face. The COVID-19 situation remains uncertain and, despite new support from UK Government, many businesses will struggle with the loss of the furlough scheme at the end of this month. We also have the threat of further restrictions, which have the potential to further damage consumer and business confidence. So we will continue to lobby for further government assistance from both Westminster and Holyrood.
We also need to start preparing for the effects of Brexit. Although much, as ever, remains uncertain on that front, elements such as the UK’s new points-based immigration system will be coming into force on 1 January 2021 and businesses need to start preparing now for the impacts that will bring.
However, it’s also important that we don’t lose sight of the opportunities the future holds for the North Highlands. The ScotWind leasing round looks set to bring significant investments in offshore wind to the region’s coastline, and plans continue to progress for the UK’s first vertical launch spaceport in Sutherland.
Ambitious plans are also coming from both UK and Scottish Governments for net zero carbon. With our local experience across a range of energy sectors, and our location and size offering a perfect testbed for pilot projects, the North Highlands is well placed to lead the way in this area.
If the past year has shown us anything, it’s that we don’t know what the future might hold for us. Whatever may come, the Chamber is here to support and promote businesses across the North Highlands and fight for a brighter future for the region.
The Scottish economy showed only weak signs of recovery where a return to trading was allowed as COVID-19 restrictions eased over the summer, according to the Scottish Chambers of Commerce (SCC) Quarterly Economic Indicator (QEI).
The outlook remains grim in all sectors, particularly for businesses in retail and tourism, which have been hit hard by restrictions and face a bleak winter as business support and confidence plummets.
Key highlights:
- On business confidence: Signs of fragile confidence emerged in some areas of business although this was compared to historic lows from the previous quarter when lockdown conditions prevailed. Trends remain significantly negative across most indicators when compared to pre-COVID-19 conditions.
- On employment: Employment levels remain on negative trends across all sectors while risk remains that unemployment is set to rise significantly due to continued restrictions and reduction in employee support.
- On sales and revenue: Around a third of construction and manufacturing, four in ten retailers and more than half of tourism firms anticipate a further reduction in sales in Q4.
- On business concerns and cost pressures: The number of financial and business services companies reporting concern about rising taxation is the highest on record for the survey.
Tim Allan, President of the Scottish Chambers of Commerce, said: “This latest survey shows how fragile some parts of the economy in Scotland remain during this crisis.
“It makes sense that there would be some improvement compared to the previous quarter when significant parts of the economy were in an almost unprecedented shut down. But this winter brings significant risks for business, including further lockdowns and a decline in government support.
“Now is not the time to cut lifeline support. We expect joblessness to continue to rise, hitting hard from the start of November. There’s an urgent need to bridge the skills gap between those who have lost their jobs to those employers that are still recruiting. Plans to develop and support training and retraining in areas such as digital and low carbon technologies will need to be implemented if we are going to build back better.
“Many sectors are showing increased worry about the risk of increased taxation. Coronavirus interventions represent a huge burden on the public finances, but we must ensure that business recovery is not strangled to repair them.”
Commenting on the results, Professor Graeme Roy, Director at the University of Strathclyde’s Fraser of Allander Institute, said:
“This latest Scottish Chambers of Commerce QEI survey shows that we are far from being out of the woods just yet.
“Businesses’ outlook on the economic environment in Q3, coupled with levels of activity in the wider economy, remain much more negative than where they were at the start of the year. This comes on the back of one of the worst quarters for business confidence ever recorded in this survey.
“The unprecedented government support – including bounce-back loans and the furlough scheme – has enabled many businesses to hang on over the summer. But as this support is wound down, many businesses will no longer be able to postpone the hardest of decisions.
“Aside from the impact of the restrictions themselves, the stop-start nature of our progress through this crisis is adding to the uncertainty and imposing its own additional cost on businesses. For some parts of our economy, where forward planning and advance bookings are key, this poses particularly serious challenges.
“There is an urgent need for government support.”
On Covid-19 restrictions and lockdowns, Tim Allan said:
“It is unviable to keep switching the lights of the economy on and off. It risks not just jobs but the wellbeing of entire communities and the security of entire sectors.
“Instead, we must focus on using the evidence at hand to target problem areas. We have seen how Test and Protect and better data means we are in a much different place than we were at the start of the pandemic. The data the Scottish Government now has is more sophisticated and detailed and will show which environments and geographical areas the virus is spreading, allowing for a more targeted approach.”
On the tourism sector, Tim Allan said:
“Tourism businesses are some of the hardest hit and many face ruin without intervention. Despite some elements of the sector having been allowed to reopen, expectations in this sector are the lowest in the survey. Capacity constraints and household and group socialising limits have added to their struggle to recover. Nor was domestic tourism a panacea, as almost 70% reported a fall compared to the third quarter last year. There is currently no sign of overseas guests returning.
“The Scottish & UK Government must provide immediate support to the sector if Covid-19 related restrictions continue to limit the sector’s ability to trade. The job support scheme recently announced by the Chancellor, whilst welcome, does not go far enough to save jobs in this sector. We need to see a dedicated package of support for the sector including business rates & VAT holidays extension and grants relief.”
On retail, Tim Allan said:
“The coronavirus pandemic has resulted in significant disruption to the retail sector with the effects differing greatly between ‘brick-and-mortar’ and online shops and smaller versus larger retailers. The mitigation measures taken to slow the pandemic have directly affected the daily operations of the retail sector. This sector is not improving as quickly as could have been expected when shops were allowed to reopen. Negative outlook in terms of sales, investment and hiring for the key pre-Christmas period suggests they are not expecting much festive cheer to be ringing the tills.
“We have raised our deep concern over the decision by the Treasury to end the tax-free shopping scheme. This is a £5.6 billion hit on the UK economy, even before accounting for the negative knock-on effect on wide international tourism spend. This decision must be reversed by the Chancellor immediately.”
On the construction sector, Tim Allan said:
“Negative sentiment has eased for some firms in the sector as many were able to get back on site during the period, though 44% reported a further decline in confidence. It is worrying that 44% expect a fall in investment and 35% a fall in sales over the next quarter. In general, outlook for Q4 remains downbeat and concern over impact of potential tax rises is becoming an increasing worry.
“We would ask the UK Government to scrap the reverse VAT charge altogether or at minimum, delay its implementation date for a further 12 months.”
On the financial and business services sector, Tim Allan said:
“More financial and business services firms expect to return to sales growth in the final quarter of the year making this the least negative sector of the survey. The number of companies in this sector reporting concern about rising taxation is the highest on record for the survey.
“Office-based businesses in this sector are ready to start supporting the rejuvenation of city centres devastated by the lockdown. We expect the Scottish Government to provide an implementation timeline of our recently submitted report calling for the phased re-opening of remaining offices to support the economy and employee wellbeing.”
On manufacturing, Tim Allan said:
“Companies in the manufacturing sector were faring slightly better when they were able to trade compared to the previous quarter when many were shut down. Nevertheless, total new orders and sales declined for almost half of manufacturing firms in the survey during the three months to the end of September. To support manufacturing companies to increase capacity, we urge the Scottish Government to amend the physical distancing for manufacturers from 2m to 1m with mitigations.”
Trudy Morris, Chief Executive, Caithness Chamber of Commerce, said:
“The latest Quarterly Economic Indicator results should send a clear message to government at both Holyrood and Westminster of the level of support for business that is still required as we enter the winter months.
“While we have seen some positive movement over the summer in the hospitality and tourism sector, the latest restrictions announced by the First Minister are likely to prove devastating unless significant support is provided quickly to all businesses which are affected or which remain unable to open.
“There are some positive signs of recovery and growth in the North Highlands, for example with Ashley Ann in Wick announcing significant expansion and recruitment plans. There are also upcoming opportunities in the region in areas like offshore wind and aerospace.
“Both UK and Scottish Governments need to monitor the situation over the winter closely and in regular consultation with business. This will ensure they are ready to act to support those who are struggling, and help develop new opportunities as and when these arise.”
To view the latest Q3 Quarterly Economic Indicator report, click here.
Business and community leaders in the far north are demanding “decisive action” by the Scottish Government to safeguard the future of Caithness air links.
Some of the area’s leading public and private sector organisations have joined forces with elected representatives to highlight the importance of Wick John O’Groats Airport to the local economy.
They are stepping up the campaign for a public service obligation (PSO) for the Wick/Edinburgh and Wick/Aberdeen routes after Caithness was left without scheduled air services earlier this year.
“It’s imperative now that we have decisive action from the Scottish Government before there is any further damage to our local economy,” said Councillor Nicola Sinclair, chairperson of Highland Council’s Caithness Committee.
She was speaking after convening a virtual “summit” to explore a sustainable future for the airport. Taking part were representatives from Highlands and Islands Enterprise, Caithness and North Sutherland Regeneration Partnership, Caithness Chamber of Commerce, the Nuclear Decommissioning Authority, Dounreay Site Restoration Ltd, Highlands and Islands Airport Limited, Highland Council, Subsea 7, Wick Harbour Authority and Scrabster Harbour Trust, together with local MSP Gail Ross and Caithness councillors.
The chamber of commerce was given credit for having prepared a detailed business plan proposing a PSO and it was noted that discussions with the national transport agency Transport Scotland had been positive.
There was a strong focus on the economic importance of the airport to industries such as oil and gas and renewables, as well as to business generally, and to the tourism sector.
“The future of Wick John O’Groats Airport is an issue that has united all the key parties across Caithness and indeed Highland, such is its importance, and I have to give credit to the very high standard of work that has been completed to date,” Councillor Sinclair said.
“I am pleased that we have reached a consensus on moving forward in jointly lobbying for the PSO. Caithness councillors will be delighted to reaffirm the council’s corporate commitment to the airport at our committee meeting this month and stand ready to make the case as required.”
Trudy Morris, chief executive of Caithness Chamber of Commerce, said: “Regular, reliable aviation routes that support business travel, inward investment and tourism will be essential to enabling sustainable, inclusive economic growth, ensuring Caithness and north Sutherland emerges stronger economically from this challenging period.
“Air services from Wick will also be key in enabling us to take full advantage of future opportunities in areas such as offshore wind and aerospace.
“Partnership working has been key to developing the business case for the PSO, and we would not have made such positive progress without support and funding from Dounreay Site Restoration Ltd through the Caithness and North Sutherland Regeneration Partnership. We welcome the vocal support of the local councillors in calling for an urgent decision from Scottish Government, and remain hopeful for a positive outcome.”
Gail Ross, the SNP MSP for Caithness, Sutherland and Ross, said: “It is imperative that we work together to support the business case for the PSO and I welcome this move. I am having ongoing talks with the cabinet secretary for transport and pressing the need for this intervention.”
A Transport Scotland spokesperson said: “We are considering carefully the business case submitted by the Caithness Chamber of Commerce for the direct subsidy of air services to Wick and will respond as soon as possible.
“We have been clear that any intervention would require multiple funding partners to restore scheduled services at Wick.”
Following the announcement by the First Minister of new measures restricting hospitality sector businesses to prevent the spread of Covid-19 in Scotland, Dr Liz Cameron, Chief Executive of the Scottish Chambers of Commerce, said:
On restrictions to pubs, bars, restaurants and cafes, Liz Cameron, said:
“These measures will sound the death knell for businesses across the hospitality sector, especially pubs and bars. Restaurants and hotels, whilst remaining open, will also be constrained on what they can provide and this will place a large dent in their already reduced income.
“Closures and restrictions will severely tamp down any signs of life in our town centres, particularly in the central belt health board areas, which have already been devastated by offices still remaining closed, cancellation of Christmas markets and other major events.
“Whilst the stay local message may align with public health messaging, it will impact nationwide support for hospitality businesses during the October holiday period. The knock-on impact will mean tough decisions including the risk of potentially more redundancies.”
On business engagement and consultation, Liz Cameron continued:
“A complete and utter lack of consultation with business only serves to compound the blows of these restrictions.
“In the vast majority of cases, the recent growth and spread of the virus is not coming from business-managed environments. In most instances, employers are playing an effective and deeply engaged role in the fight against the spread of the virus.
“We simply cannot continue to keep switching the lights of the economy on and off. Where is the plan to show that this action will stop the spread and where is the plan to manage working and living with the risks of this pandemic in the medium term are questions businesses are asking.”
On funding support for businesses, Liz Cameron, said:
“We now need to see firm commitment from the UK Government as to what immediate support is going to be available to support businesses recovery. The funding package announced by the Scottish Government is long overdue, but welcome nonetheless. We will look closely at the detail of these packages but we fear they will not be enough to avoid the worst of consequences for the Scottish economy.
“We also need to ensure those businesses that have not been able to reopen yet such as soft play are also able to access this lifeline support.”
Scottish Chambers of Commerce: Business says no to national lockdown
Following a meeting of Scottish Chambers of Commerce’s Business Advisory Group, where business experts reviewed the State of the Scottish Economy, Tim Allan, President of SCC, said:
“Talk of a further blanket lockdown is unacceptable to Scottish businesses. It would damage consumer and business confidence which have already taken an unprecedented economic hit throughout this crisis.
“Returning to national lockdown measures will take our economy back to square one – we simply cannot continue to keep switching the lights of the economy on and off. It risks not just jobs but the wellbeing of entire communities.
“Instead, we should focus on using the evidence we have to target problem areas. We have seen how Test and Trace and better data means we are in a much different place than at the start of the pandemic. The data the Scottish Government now has is sophisticated and detailed and will show which environments and geographical areas the virus is spreading. In the vast majority of cases, the recent growth and spread of the virus is not coming from business-managed environments. Companies across Scotland have invested heavily to protect its customers and employees – we are playing an outsized role in the fight against the spread of the virus.
“We know the virus will be with us for a long time. We must learn to manage it so we can carry on with our lives and protect livelihoods while keeping the risk of transmission as low as possible.”