Coronavirus in Scotland: Hospitality chiefs say restrictions news means small premises still not viable

Leaders of the hospitality trade in Scotland have welcomed the announcement that Covid restrictions will be eased from Monday, allowing alcohol to be served indoors in bars, cafes and restaurants, but warned that physical distancing measures still in place could be the death knell for smaller businesses.

The Scottish Licensed Trade Association (SLTA) said while the move to allow the purchase of alcohol until 10:30pm was “very welcome”, the industry was still “a long way from fully reopening”.

And the Scottish Hospitality Group (SHG) warned the easing of rules was not enough and would only allow around half of the country’s 8,000 pubs, hotels and restaurants to reopen on a commercial basis.

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SLTA managing director Colin Wilkinson said the decision to allow alcohol to be drunk indoors was vital, as pubs with beer gardens had not been able to trade effectively since the last relaxation of restrictions on April 26 given the poor weather.

The hospitality industry has said the "glass is half full" over Covid restrictions easing.

Calling for a quick resolution to the uncertainty around physical distancing after Nicola Sturgeon said that it would no longer be necessary in homes, but remain in force in other settings, including pubs and restaurants, Mr Wilkinson added: “We need clarity on this as soon as possible as hospitality businesses operating small premises are simply not viable with physical distancing in place.

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“This reaffirms the stark reality of the challenges facing the licensed trade in that we’re a long way from fully reopening despite the positivity of the announcement.

"And bear in mind that the late-night hospitality industry, including night clubs, remains in meltdown with no indication of when it can start to welcome back customers.

“Many businesses will continue to fall further into debt and we have previously pointed out that a typical small hospitality business has taken on between £60,000 and £90,000 in bank debt and deferred bills as of February this year just to survive Covid, with that debt rising with every week of low or no income.”

Stephen Montgomery of the SHG said new data showed the hospitality industry had experienced the worst effects of the pandemic restrictions.

The figures, from the Business Insights and Conditions Survey (BICS) collated by the Office for National Statistics and published by the Scottish Government, show only 41 per cent are currently trading and 76 per cent have lower turnover than expected – more than twice the all-industry average.

Nearly half – 46 per cent – say they have less than three months’ cash reserves, if any, and 8 per cent fear they won’t survive the next three months, again more than twice the all-industry average.

He said: “Of course this is going to be welcome news for some businesses. It’s especially good for staff who can return to work and we know that customers are desperate to get out and about again.

“But no-one should be fooled by the recent sight of people drinking in beer gardens. Just like the weather we’ve had this May, there are still stormy times ahead.

"We’re going from a Covid pandemic into a debt pandemic. More businesses will go bust unless they’re given more help to get through.

“The First Minister has repeatedly said that they’d be driven by data, not dates. Well, the data that really matters – which is how much impact Covid-19 is having on people’s health – could hardly be better and seems to be going in just one direction.

"So, she should bring forward the dates and allow us to safely enjoy the economic recovery that our counterparts in England are about to benefit from.”

The SHG is now demanding the new Scottish Government bases restrictions on hospital admission and mortality data, not the number of cases given the positive impact of the vaccine, lifts restrictions quicker than planned, aligns restrictions with England to avoid Scottish businesses being unfairly disadvantaged and continues grant funding for those businesses that are unable to trade viably, especially night-time and music venues.

The First Minister did announce an extra £40m of financial support for night-time businesses which remain closed.

Meanwhile Andrew McRae, the Federation of Small Businesses (FSB) Scotland policy chair, said the change in restrictions was a “leap forward for the bulk of Scotland’s business community, giving more firms the scope to turn a profit and others the opportunity to welcome back customers”.

He said while the easing was no guarantee of a full recovery for small businesses, “many leaders of local and independent firms will have a spring in their step after the news”.

However, on the prediction that Moray will remain in level three due to an outbreak of coronavirus, David Groundwater, FSB’s development manager for the Highland area, said: “However necessary the maintenance of restrictions in Moray might be, this announcement will worry many local firms.

"If Moray is to remain at level three, then new cash to support these operators must be dispersed quickly. After this point we’d urge the Scottish Government to ease restrictions as soon as it is safe to do so.”

Mr Wilkinson added: “We are delighted for the island communities that can move down to level one, but it is disappointing – although completely understandable given the Covid situation – that it is highly probable Moray will remain in level three. That First Minister Nicola Sturgeon confirmed that there will be additional financial support will offer some comfort for businesses in Moray.”

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