Covid Scotland: One in four Scottish businesses facing 'immediate financial peril’ if restrictions extended today by Nicola Sturgeon

One in four Scottish businesses are facing “immediate financial peril” if Covid-19 restrictions are expanded today, industry leaders have warned.

A poll of nearly 700 companies by the Scottish Chambers of Commerce has revealed many firms are struggling with existing measures.

Almost a quarter (24 per cent) face severe financial consequences if vaccine passports and home working measures are widened, the survey revealed – as the Scottish Government prepares to announce new Covid restrictions.

Meanwhile, a separate survey carried out by Scotland’s hospitality trade bodies found more than three quarters of hospitality businesses would not survive the winter without further Government support if restrictions are extended.

One in four Scottish businesses will suffer severe financial consequences if Covid restrictions are introduced., the SCC has said.

The group of organisations, which include the Scottish Beer and Pub Association, the Night-time Industries Association and the Scottish Hospitality Group, warned any further measures would come as a “devastating blow” for businesses in the run up to Christmas.

Ministers will meet today to decide whether enhanced or new restrictions are required, with Nicola Sturgeon to update Holyrood on their decisions this afternoon.

Last week, Deputy First Minister John Swinney told MSPs the government was “considering” measures including requiring vaccine passports for indoor venues such as pubs and restaurants.

Along with a wider vaccine passport programme, which may include negative lateral flow tests as well as proof of vaccination, the Government is considering tightening rules around the wearing of face coverings and further requirements for ventilation and home working.

Tighter restrictions now would avoid the need for harsh lockdowns of the kind seen last year, Mr Swinney said.

Dr Liz Cameron, chief executive of the Scottish Chambers of Commerce, said: “Any reintroduction of restrictions will act as a painful economic deterrent for businesses across Scotland.

"As we forewarned last week, we urge ministers not to take a massive step backwards in our economic recovery from the pandemic which would place thousands of firms and jobs at risk.

“It is critical that our economic recovery does not lag behind that of competitors across the globe. Going backwards at this stage will put our recovery at risk, create further uncertainty and undermine consumer confidence."

She added: “If restrictions are to be reintroduced under legislation, then companies will, of course, be forced to accept them.

"But ministers must urgently outline the evidence for these decisions, detail what financial support the Scottish Government will make available to affected sectors and provide an end point to burdensome restrictions.”

Nearly two-thirds of firms polled by the Scottish Chambers of Commerce Network are opposed to more restrictions, with 45 per cent already feeling the measures currently in place are no longer justified.

The Scottish Chambers of Commerce has already written to the Scottish Government stating that it is essential that Scotland’s business community is fully consulted before any additional economic deterrents are introduced.

Those in Aberdeen and Grampian were even more opposed to restrictions than businesses elsewhere in the country.

Around 69 per cent of businesses in the region are against further restrictions being introduced, with 28 per cent warning that it would have severe financial implications for their business.

The separate survey of 150 restaurants, hotels, pubs and nightclubs found 83.6 per cent of hospitality businesses say that turnover is down by over 10 per cent on pre-pandemic levels, while 95 per cent believe they will have to cut staff hours if increased restrictions result in an expected drop in trade.

In a joint statement, the trade bodies, which also include Hospitality Scotland and the Scottish Licensed Trade Association, said: “From this survey it is clear to see that Scotland’s hospitality sector is in a precarious situation, making the recovery period all the more important. Four out of five businesses are significantly below pre-pandemic levels and with inflation, debt levels and other costs rising, the sector is facing a very difficult winter ahead.

“The survey also shows that Covid certification has a hugely negative impact on businesses already caught by the policy and any extension will have a devastating impact on the wider hospitality sector.”

They added: “It’s a similarly worrying picture for staff, with over 95 per cent of businesses saying that if trade reduced in line with expectations, they would have to reduce staff hours by the same or greater percentage as the loss of turnover.

"Given that turnover has reduced by 20 per cent to 40 per cent for businesses impacted by the scheme, this would be a devastating blow for the sector’s 100,000 workers just in the run-up to Christmas.

"The Scottish Government must take this into consideration when making the decision on any extension of the Covid certification and provide the economic support to keep thousands of businesses afloat.”

Scottish Conservative shadow Covid recovery secretary Murdo Fraser said: “This new polling shows how devastating further restrictions would be for many Scottish businesses.

“The success of the UK’s vaccine roll-out programme has allowed our economy to reopen, but many of our local businesses remain on a knife edge. A return to economically damaging restrictions could be fatal for these struggling enterprises.”

He added: “Our economy cannot take any more punishment. The SNP Government must heed this warning and drop any knee-jerk plans for a return to stricter Covid measures.

"The SNP’s focus should now be on protecting the vulnerable by ramping up booster jags, so that our wider economy can continue to recover.”

A Scottish Government spokesperson said: “No decisions have been made about any potential changes. Parliament will be informed if and when any decisions are reached.

“Since the start of the pandemic, the Scottish Government has provided more than £4.4 billion to help businesses cope with the impact of Covid-19. "

The spokesperson added: “We continue to support retailers and other businesses as we rebuild the economy following the pandemic, including through the work of the retail strategy, the Town Centre Review and City Centre Recovery Taskforce, as well as the Scotland Loves Local (SLL) £10 million multi-year support programme.

"This includes a fund, a SLL marketing campaign and a SLL gift card, which supports local online businesses and aims to help increase footfall and activity while revitalising local places and town centres by encouraging communities to think, choose and love local.”

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