Scott Wright: Scottish businesses kick a new lock while they’re down

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It was only normal that when the temporary removal of coronavirus restrictions for the holidays was suddenly rolled back on Saturday, the spotlight fell on families who had seen their long-awaited Christmas plans evaporate.

But it did not take long for the complete, crippling effect on the economy of the next wave of closures to become apparent, too.

While attempts to minimize the rapid spread of a new coronavirus variant are understandable from a public health perspective, the fresh pain that business owners would feel right now or ease the concerns of those concerned about the long-term effects on their jobs will not be dulled.

Customer-facing firms, such as those in the hospitality, tourism and retail industries, were already facing a severely restricted Christmas period prior to Saturday’s news that for three weeks from Boxing Day, the entire Scottish mainland will be put under the highest level of protection.

It was not until Dec. 11 that, thanks to the upgrade to level three, retailers and hospitality businesses in most of western and central Scotland were able to resume trading. And even then, trade is heavily limited in pubs, restaurants and hotels as they are not permitted to sell alcohol and must close their doors at 6 pm.

However, at least stage three presented companies with a brief window of opportunity to rebound from a miserable year in which, due to the steps taken to combat the coronavirus, they were robbed of significant portions of regular operating hours.

Now, as of Saturday, with companies in most areas all but closed again, calls were rightly made for the Scottish Government to provide extra, “exceptional” cash help to curb the inevitable effect.

Four leading Scottish business groups captured the crushing reality of the threat raised by the new closure, writing to First Minister Nicola Sturgeon on Sunday to appeal for “extraordinary” funds to alleviate the pressure on already struggling businesses.

The groups said they acknowledged the difficulties caused by the new variation in the letter, written by Marc Crothall of the Scottish Tourism Alliance and signed by the heads of UKHospitality (Scotland), Scotland Food & Drink and the Scottish Chambers of Commerce. But they cautioned that if steps to control the virus are not followed by more meaningful help for companies, there would be further economic destruction.

In the absence of ‘extraordinary’ funds, Crothall said that in the coming months, the prospects for a turnaround in the tourism and hospitality industries will be even dimmer.

The latest freeze suggests that hotel groups and restaurants that have been taking bookings for the holidays will unexpectedly see their expectations thoroughly and truly dashed for an uplifting end to a miserable year. That’s all the more painful because Christmas and New Year’s are seen by many companies as a time to build up cash reserves before January and February hit the quieter months.

“Unless a fairer and higher level of support is made available quickly, it is likely that many more businesses will be forced to close temporarily or permanently; operators are now dealing with a flood of cancellations and have lost much needed revenue as a result of yesterday’s (Saturday) announcement,” Mr. Crothall wrote.

“With no way to operate profitably in the coming weeks and possibly months, even greater financial support is needed to save businesses and jobs, including those in the supply chain and the livelihoods of many in the local communities the industry supports.”

The Scottish Government reacted last night by announcing a £ 104.3 million funding package for tourism and hospitality companies in the new year. Although industry groups have welcomed the assistance, it should be noted that this is not new funding, but part of the £ 185 million package announced earlier this month by Finance Minister Kate Forbes.

Questions were posed as to whether the grants, amounting to up to £ 3,000 every four weeks for companies legally needed to close, would be appropriate, particularly given the loss of revenue likely to result from the closure over the holidays.

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