Scots businesses warn more needed for Covid-19 recession

The Chancellor’s statement was welcomed by business organisations across Scotland, but they also warned more would need to be done to help the economy cope with the looming post-Covid recession.

Andrew McRae from the Federation of Small Businesses

Andrew McRae of the Federation of Small Businesses Scotland said good news had been “in short supply” but the Chancellor had laid out a plan to “protect jobs and stimulate local economies”.

He added: “However, it should be noted that there are many small businesses that were not supported by the Chancellor’s package – with company directors once again overlooked. Given these businesses have had little to no support in over 100 days, FSB is hoping that support can be provided in the near future.”

Mr McRae said the “kickstart” jobs scheme could prevent a lost generation of young people, “but for it to work in local economies, it must focus on the small employers who employ around one million people in Scotland. We can’t have a situation where local businesses are behind a queue of big corporates because of a target-driven approach.”

He added: “Reducing VAT in sectors hit especially hard by the pandemic is an astute move. It will make everyday activities like grabbing a coffee and cake more affordable for budget conscious consumers – while making the country a more attractive destination for tourists home and abroad.

“Scotland is fortunate to have an array of fantastic food offerings in restaurants, cafes and pubs across the country. We need to encourage more people to get back out into the community and spending money, so any moves to do this are welcome.”

Mr Sunak’s VAT cut and “Eat Out to Help Out” scheme were also welcomed by the Scottish Licensed Trade Association, however managing director Colin Wilkinson, said more needed to be done to protect the sector which was facing mass job losses. “This substantial but temporary reduction in VAT for accommodation and food gives the sector a much-need boost,” he said. “Extending the commercial rates holiday would have also been a huge relief for the industry and again sector-specific support should have been introduced to assist those in most need. The entire industry needs ongoing support for many months, stretching to years if it is to recover to anything like the level it was prior to Covid-19.”

Marc Crothall, chief executive of the Scottish Tourism Alliance said the Chancellor’s measures had gone beyond what they had been anticipating, particularly the hospitality VAT cut from 20 to five per cent. “I know this news will come as a huge relief today for thousands of pubs, restaurants, accommodation providers and visitor attractions across Scotland and their employees, whose jobs have been given increased protection,” he said. “The ‘kick start’ scheme to create more jobs for young people is a huge boost for the tourism sector, as indeed is the announcement of support for businesses taking on new apprentices, however we will continue to push for support for all employed in the tourism sector. Further tailored support for older people within the sector is still required as the stark reality of the unemployment crisis looms large.”