Commenting on Scotland moving to Phase 3 of the easing of lockdown restrictions as announced today by the First Minister (9th July), Dr Liz Cameron, Chief Executive of the Scottish Chambers of Commerce said:
“Today’s confirmation by the First Minister that the country can now return to more normality will be very much welcomed by all, particularly businesses that are due to reopen and begin to build up their trade.
“Hospitality and tourism businesses now need time to plan therefore the exact detail around the mitigations they will be expected to put in place to safely reduce physical distancing to 1m from 2m is needed now.
“Our business communities across Scotland are eager and ready to get back to work in order to breathe life back into our economy and protect the livelihoods it supports. Businesses have invested heavily to comply with all health & safety regulations and government guidance. We are firmly open for business and would ask everyone to come out and support your local businesses.
“The next great challenge is now determining if consumer demand can be stimulated and maintained as government support measures taper off in the next few months.’’
The Chancellor of the Exchequer today delivered a statement to the House of Commons outlining Phase 2 of the UK Government’s economic recovery plan.
We have received an update from Scottish Chambers of Commerce laying out the key reserved areas which will apply in Scotland, as follows:
Support for jobs:
- Job retention scheme bonus – employers will receive a one-off bonus of £1,000 for each furloughed employee who is still employed as of 31 January 2021, to provide additional support to firms to keep employees as demand returns. Further details will be available at the end of the month.
- Kickstart Scheme – a £2bn fund to create hundreds of thousands of new, high quality, fully subsidised jobs for young people aged 16-24, claiming Universal Credit and at risk of long term unemployment.
- Expansion of work search support – including a new online one-to-one Job Finding Support offer for the recently unemployed, additional funding for the Flexible Support Fund (including boosting DWP’s Rapid Response Service), doubling the number of work coaches and additional intensive support for those who have been unemployed for more than three months; as well as an expansion of support offered to young job seekers.
- Construction Talent Retention Scheme – an online job-matching platform minimising redundancies in the construction sector by supporting the retention and redeployment of workers across the UK.
Support for the tourism and hospitality sectors:
- Temporary VAT reduction – the UK government will cut the rate of VAT applied across the UK to hospitality, accommodation and attractions from 20% to 5%, for a period of six months. The reduced rate will apply from 15 July 2020 and guidance will be published tomorrow.
- Eat Out to Help Out – a 50% discount on eat in meals and non-alcoholic drinks at participating restaurants, cafes or other food services establishments across the UK. This scheme will be valid Monday-Wednesday during August with the discount capped at £10/head/meal. Participating establishments will be fully reimbursed and registration guidance will be published tomorrow.
Green/R+D Investment:
- Social Housing Decarbonisation Demonstrator – a £50m demonstrator project to start the decarbonisation of social housing over 20/21, focussing on innovative approaches to retrofitting social housing at scale.
- Decarbonising Public Sector Buildings – investment to upgrade public sector buildings, making them fit to help meet net zero with energy efficiency and low carbon heat measures. This measure is in a devolved area of policy but will apply to the UKG estate across the UK.
- Direct Air Capture – up to £100m to support DAC technologies, as announced by the PM last week.
- UKRI world class labs – A £300m investment in 20/21 to boost equipment and infrastructure across universities and institutes across the UK
We are aware that through the Barnett formula, today’s announcements will result in Scottish Government receiving an additional £800m. We will be working closely with Scottish Chambers of Commerce to ensure that Scottish Government works with business and targets support where it is needed most.
We will update you as we receive further information on today’s announcements and any new support announced by Scottish Government over the coming days.
Commenting on the list of countries identified as ‘air bridges’ by the Scottish Government announced today (8th July), Dr Liz Cameron, Chief Executive of the Scottish Chambers of Commerce said:
“Businesses across Scotland will be relieved that we now know which countries tourists will be able to travel to without having to go into quarantine. This will enable our travel and tourism industry to start taking bookings once again.
“We are pleased to see the list of countries are broadly aligned with the UK Government and we appreciate the rationale presented as to why Spain is not currently included. We are reassured by the First Minister’s commitment to keep this under daily review in an attempt to identify additional mitigation measures which could be adopted quickly. We need to see Spain added to the list safely and quickly, not only for the aviation and tourism industry but also for moving freight and exports.
“Spain is an important market for Scotland and figures from VisitScotland showed visitors from Spain spent just under £80m in 2018. Business has the expertise to work with government to identify and implement additional mitigation measures to enable the restart of this important tourist and trade route, especially during the peak summer period.”
You can read or watch today’s announcement (08/07/2020) here.
The UK Chancellor Rishi Sunak has just announced a further package of UK Government support to help businesses, individuals and public services through the Covid-19 crisis.
Measures in reserved areas that will apply in Scotland include:
- Support for jobs:
- Job retention scheme bonus – employers will receive a one-off bonus of £1,000 for each furloughed employee who is still employed as of 31 January 2021, to provide additional support to firms to keep employees as demand returns. Further details will be available at the end of the month.
- Kickstart Scheme – a £2bn fund to create hundreds of thousands of new, high quality, fully subsidised jobs for young people aged 16-24, claiming Universal Credit and at risk of long term unemployment.
- Expansion of work search support – including a new online one-to-one Job Finding Support offer for the recently unemployed, additional funding for the Flexible Support Fund (including boosting DWP’s Rapid Response Service), doubling the number of work coaches and additional intensive support for those who have been unemployed for more than three months; as well as an expansion of support offered to young job seekers.
- Construction Talent Retention Scheme – an online job-matching platform, minimising redundancies in the construction sector by supporting the retention and redeployment of workers across the UK.
- Support for the tourism and hospitality sectors:
- Temporary VAT reduction – the UK government will cut the rate of VAT applied across the UK to hospitality, accommodation and attractions from 20% to 5%, for a period of six months. The reduced rate will apply from 15 July 2020 and guidance will be published tomorrow.
- Eat Out to Help Out – a 50% discount on eat in meals and non-alcoholic drinks at participating restaurants, cafes or other food services establishments across the UK. This scheme will be valid Monday-Wednesday during August with the discount capped at £10/head/meal. Participating establishments will be fully reimbursed and registration guidance will be published tomorrow.
- Green/R+D Investment:
- Social Housing Decarbonisation Demonstrator – a £50m demonstrator project to start the decarbonisation of social housing over 20/21, focussing on innovative approaches to retrofitting social housing at scale.
- Decarbonising Public Sector Buildings – investment to upgrade public sector buildings, making them fit to help meet net zero with energy efficiency and low carbon heat measures. This measure is in a devolved area of policy but will apply to the UKG estate across the UK.
- Direct Air Capture – up to £100m to support DAC technologies, as announced by the PM last week.
- UKRI world class labs – A £300m investment in 20/21 to boost equipment and infrastructure across universities and institutes across the UK
Accompanying documents have been published here.
Many of the COVID-19 support schemes announced by Scottish Government and administered by Highland Council will be closing on 10 July, so if you are eligible to apply for support and have not yet done so, this is your last opportunity.
We have laid out key details below along with links to the Highland Council website for each scheme.
COVID-19 Bed and Breakfast Grant
Key eligibility criteria:
- B&B business operating with either a personal or a business bank account
- Must gain at least 35% of your income from the affected business
- Cannot have previously received a grant from other schemes
Full details on the Highland Council website.
COVID-19 Newly self-employed hardship fund
Key eligibility criteria:
- Became self-employed on or after 6 April 2019
- Over 50% of income is from self-employment
- Trading below £50,000 in 2019-2020 financial year
Full details on the Highland Council website.
COVID-19 Self-Catering Business Grant
Key eligibility criteria:
- Premises registered as a self-catering unit on 17 March 2020
- Must currently be on the non-domestic rates register
Full details on the Highland Council website.
COVID-19 Small Business Grant
Key eligibility criteria:
- Business premises must have been occupied on 17 March 2020
- Must currently be on the non-domestic rates register and;
- in receipt of Small Business Bonus Scheme or Rural Relief (or eligible for SBBS but in receipt of one of various other reliefs such as Nursery Relief)
Full details on the Highland Council website.
COVID-19 Tenant/Occupier Small Business Grant
Key eligibility criteria:
- Tenant or occupier of premises such as shared office space, business incubator, industrial unit for which landlord is registered ratepayer
- Registered business or partnership, employing at least one person, with business bank account
- Have a lease signed before 17 March 2020
Full details on the Highland Council website.
We know that many businesses are facing additional costs as they look to reopen in line with Scottish Government guidance, and these grants could go some way to helping with these costs. We encourage any business which is eligible but has not yet applied to do so before the deadline of 5pm on 10 July.
It seems hard to believe that we are now more than halfway through the year, with the summer solstice not long past and the nights slowly but surely drawing in once more. This has been a year of unprecedented challenges for businesses in the North Highlands, and this looks set to continue as we move towards the second half of the year and a gradual easing of lockdown restrictions.
Recent announcements from Scottish Government have provided some good news and indications for the path towards the recovery of our economy. In particular, the ability of tourism and hospitality businesses to restart operations from 15 July will be welcome news to many.
However, it’s clear that loosening of restrictions on tourism cannot and should not happen in a vacuum, and that the industry still faces significant challenges even after businesses are able to start operating again.
Transport, for example, will play a key role in ensuring the success of tourism in the North Highlands in a post-lockdown world. With the likelihood of some form of quarantine on international travel, and an understandable wariness about travelling too far from home, domestic tourism will have a key role to play in the success of the area.
Sadly, this year’s developments have included both Loganair and Eastern Airways withdrawing their air services from Wick to Edinburgh and Aberdeen respectively, leaving us with no commercial air services to the region. As a Chamber, we are continuing to push for a Public Service Obligation (PSO) from Wick to help ensure that both business and leisure travellers have access to reliable, affordable air services.
It is also important that Government listens closely to the concerns of communities such as the North Highlands when it comes to restarting tourism. We all appreciate the importance and value that the sector brings to the region, but many are concerned about the public health implications as we come out of lockdown.
This is absolutely an issue for Government and should not be one for businesses to manage. We need clear, unambiguous guidance and messaging from Scottish Government to address the concerns of communities like the North Highlands as the sector reopens.
A real positive from the COVID-19 situation, if such a thing can be found, has been how quickly Governments, local authorities and businesses have been able to act and to work closely together to find solutions to the most pressing issues. As we start to return to something approaching “normal”, there is a real opportunity for this kind of dynamic, responsive approach to business issues to continue and to abandon some of the red tape that has so often held us back.
Speed will be of the essence in ensuring that our tourism industry can survive and thrive in the coming weeks, months, and years. While we understand and appreciate the work that Scottish Government is doing to support tourism in the longer term, it is important that immediate action is taken to support the industry.
We have a key list of asks on the table, from VAT reduction to sector-specific extensions of the Coronavirus Job Retention Scheme, and we need Scottish Government to act where they can on these, and to clearly represent the needs of businesses to UK Government where action is needed on reserved matters.
As a Chamber, we will continue to listen closely to the needs of our members and the community of the North Highlands, and do everything we can to ensure that Government delivers the support we need in these challenging times.
Commenting on the UK Government’s plan for quarantine-free travel from 50 ‘low-risk’ countries, Dr Liz Cameron, OBE, Chief Executive of the Scottish Chambers of Commerce said:
“The lack of a four-nations approach to the easing of quarantine restrictions is hugely disappointing and damaging. At this time, this is sending a message that Scotland is not yet open for business and will leave us struggling to interpret what this means for tourism and international trade. Businesses will continue to struggle as long as the suggestion is out there that Scotland somehow may have separate quarantine restrictions and that the necessary balance between health and jobs is somehow seen differently north of the border.
“This could have a severe risk of further damaging the aviation sector in Scotland which has already been widely affected by this ongoing crisis in terms of job losses and impair on their ability to support the long term recovery of our economy if they cannot support the routes to investment and trade that businesses need.
“Complex policy variations and piecemeal measures simply confuse Scottish businesses, its global trading partners and the people of Scotland more widely. At a time when businesses hope to capture pent-up demand after months of devastating losses, there has never been a more important moment to show that we are ready and ‘open for business’ again.
“We urge the Scottish Government to commit to align with a UK-wide approach. In the light of current and expected job losses, we need the Scottish Government to make their decision as a matter of urgency hopefully not creating further divergence. Politics must be put to one side by all in order to give Scottish businesses the ability to drive up demand and do what they do best, making Scotland the best place to invest and do business.’’
Following a highly successful first funding round for its COVID-19 support scheme, enabled by a £100,000 contribution from Dounreay Site Restoration Ltd (DSRL), the Caithness Business Fund has been able to support a wide range of businesses across the North Highlands as they look to reopen.
Grants have now been distributed to all successful applicants from the first round to enable a range of activities, including the purchase of PPE and cleaning supplies, modifications to offices and workshops, and development of clear policies and procedures to enable a safe return to work.
Several successful applicants are highlighted below, showcasing the range of businesses and activities supported by the Fund.
Annie Body, Annie’s Bakery, said:
“We opened a new cafe area as part of our business just prior to lockdown, and unfortunately it has been closed ever since. The support from the Fund will be really helpful in allowing us to open up an outside area with a marquee and patio heaters, allowing us to welcome customers back as soon as it is safe to do so.
“This will make a real difference to our business, as with current guidelines we could only have two tables inside our cafe at present and this funding will allow us to return to our original five.”
Carey Henderson, The Beauty House, said:
“I’m delighted to have received funding from Caithness Business Fund, it’s allowed me to make sure my salon is a safe environment for when I can welcome clients again. I’m really looking forward to opening soon and am grateful to the Fund for supporting me through the application process”
Steven Buttress, Buttress’s said:
“I am very grateful for the support from the Fund, which will help with getting the shop ready for reopening and putting appropriate signage and protection in place. We hope to reopen as soon as we can get the shop ready to a safe standard and look forward to welcoming our customers back soon.”
Diane Mathiesen, Gents Cutting Room said:
“Keeping my customers and myself safe once I am able to reopen my barber shop is my first priority, and the support from the Fund will be a great help in achieving that. It will help me to purchase all the right equipment to ensure that people can safely get what I’m sure will be a much-needed haircut once I reopen.”
Morag Mackenzie, Morags said:
“We have never applied for any grant funding before so we were delighted to be successful in this. We moved to offering takeaway through the shutdown, and the money from the Fund has gone a long way to helping us develop outdoor seating so we can restart table service in a way that helps our customers feel comfortable and safe.
“There is a long way to go yet and a lot of uncertainty but hopefully with us and other town centre businesses opening up again we will start to get a more positive feel to the town centre.”
Trish Bremner, Norbloc Construction said:
“As a business operating in the construction sector, we have been closely following the guidance from the Scottish government for restarting the industry. This has involved a significant cost to us in terms of carrying out health and safety assessments and ensuring that all the elements such as signage and PPE are in place to enable a safe return to work. Over the past three weeks we have been able to manage a phased return and are now operating at around 70% capacity.
“The support from the Fund has made a big difference in helping us to meet these costs and manage this phased return. The safety of our workforce is our first priority and this support has helped us to ensure that we are able to guarantee a safe working environment for our team.”
The first round generated a significant level of interest and, recognising the challenges faced by business as they enter the COVID-19 recovery period, the Nuclear Decommissioning Authority generously contributed an additional £100,000 to enable a second funding round, which closed on 30 June 2020. The Fund looks forward to supporting even more businesses as it assesses these applications over the coming week.
The latest Scottish Chambers of Commerce (SCC) Quarterly Economic Indicator (QEI) survey for Q2 of 2020 confirms the economic pain that has been felt by Scottish businesses across sectors in all parts of the country due to the Coronavirus (COVID-19) outbreak and the subsequent lockdown. The survey, conducted by Scottish Chambers of Commerce in partnership with the Fraser of Allander Institute, is Scotland’s longest-running economic survey of its kind.
Key highlights:
- On business confidence: Levels of confidence have fallen to historic lows in many of the sectors, with construction, retail & tourism most affected by the crisis
- On employment levels: Employment trends suggest the UK Government furlough scheme has been successful in limiting the scale of job losses. However, negative employment expectation levels highlight the long-term challenge for businesses to retain employees and protect jobs
- On cashflow levels: Cashflow – a key economic indicator of how a business is able to cover costs and report profits – has fallen to record lows for many sectors. In every sector, with the exception of manufacturing, the proportion of firms applying for credit is at the highest level since the question was introduced in 2014
- On business concerns and cost pressures: Many businesses will have had to rely on cash reserves and government support schemes to meet fixed costs, with overhead costs rising across all sectors.
Commenting on the results, Tim Allan, President of the Scottish Chambers of
Commerce, said:
“In many instances, these results are among the worst over the 30-year history of the survey. However, the circumstances of which they have arisen means that they should come as little surprise. COVID-19 has drastically halted or limited activity across all sectors of the Scottish and global economy.
“Our message to government is this: work productively with businesses in our shared aim of protecting jobs and local economies that may be lost forever if action is not taken now. Businesses are eager to do whatever they can to adapt to what will be a testing business environment; which will include changing workplace practises, dramatically evolving business models and re-skilling the workforce which will be critical across all sectors.
“It is critical that governments in Holyrood & Westminster continue to provide business support for companies during and beyond the easing of lockdown restrictions. A sudden end to these vital financial support measures would not be welcome by anyone and a tsunami of jobs would disappear overnight.
“Looking towards the future, governments must accelerate investment plans to fuel economic demand and activity as well as providing support for sectors to adapt to the new economy. This must go hand in hand with job guarantee and training schemes that ensure that we do not see a lost generation of talent.”
On the construction sector, Tim Allan said:
“The construction sector has been in shutdown – aside from essential projects – for the majority of the lockdown period and the re-opening plan for the sector has just come into play. More than half of firms are reporting and expecting declining investment for the next quarter. Perhaps the greatest challenge for the sector has been managing increased costs while demand has been either very low or zero. This has led to a significant decrease in workload and enquires for future work which will be of concern to those in the sector. The Scottish Government must take action to unlock a pipeline of future work to safeguard skills, experience and jobs in the building sector.’’
On the manufacturing sector, Tim Allan said:
“Some manufacturing businesses and outlets will likely have continued to operate in the lockdown period by contributing significantly to the public health response or supporting an essential service. Around half of firms in the survey have reported falls in orders and only around a quarter expect these trends to rise in Q3 with levels of increases and profits also at very low levels. The sector is being impacted by high cost pressures from raw material prices and other overhead costs, it will need support for these as it attempts to drive future demand.’’
On retail and wholesale, Tim Allan said:
“The retail sector has reported some of the lowest ever net balances recorded for the survey. Profit levels have plummeted and investment levels have collapsed with fewer than 10% of firms expected to increase investment and 70% expect levels to remain unchanged or fall in the next quarter. The major challenge for many of Scotland’s high streets and town centres is determining if the costs occurred to re-open safely will be supported by increased demand to make these businesses sustainable.
“The sector needs measures that will boost confidence and a temporary VAT cut by the Treasury will stimulate consumer demand.”
On tourism, Tim Allan said:
“The tourism and wider hospitality sector has suffered heavily, placing the sector into hibernation throughout the lockdown period. These issues as well as the increased costs firms will face to re-open safely, and reduced customers in any scenario, places the sector firmly in the danger zone.
“The UK Government must immediately reduce the rate of VAT on hospitality and tourism services including accommodation, food, beverages and visits to attractions to boost activity and consumer confidence.
“The current physical distancing guideline of 2 metres is having major implications on businesses to restart viably therefore an urgent decision from Scottish Government to reduce physical distancing from 2 metres to 1 metre is essential to support recovery.’’
On financial and business services, Tim Allan said:
“The sector is among the least depressed of the sectors, perhaps due to being the most equipped to operate remotely. However, at least half of respondents have reported falls in confidence, sales, investment, cashflow and profits. Like in other sectors, firms are reporting a sudden increase in overhead cost pressures and are fearful of rises in taxation.’’
Commenting on the results, Professor Graeme Roy, Director at the University of Strathclyde’s Fraser of Allander Institute, said:
“This latest survey from the Scottish Chambers of Commerce presents a sombre picture of the scale of the challenge now facing the Scottish economy.
“Across the board, confidence has plummeted, with a sharp fall in sales, turnover and investment across the business base. Chief amongst these was the unprecedented response from the tourism community, where a staggering – albeit not unsurprisingly – 95% of firms reported a fall in business confidence.
“What is particularly worrying is the employment outlook. The survey shows a clear warning of what is to come, with a sharp rise in unemployment now inevitable as businesses adjust to a new normal.
“The immediate priority for many businesses is survival.’’