Coronavirus: post-shutdown support is essential

Groups call for continued government assistance to ensure industry’s survival

pint pouring

THE continuation of the Coronavirus Job Retention Scheme, a new grant for businesses with a rateable value above £51,000 and a reduction in both VAT and business rates are among the measures that would help the hospitality and tourism industries to survive in the months following the COVID-19 shutdown.

With the UK Government poised to outline a ‘road map’ for easing the current lockdown, trade groups and commenters have called on both the UK and Scottish governments to continue support for the industry in the months ahead to ensure its survival.

Trade groups including UK Hospitality, the Scottish Licensed Trade Association and Scottish Tourism Alliance have written to both governments to reiterate the importance of support for businesses with a rateable value of more than £51,000.

In addition to extending the current £25,000 grant to those in the higher rateable value bracket, the groups have proposed a new monthly grant to cover 100% of a company’s fixed costs.

The grant, distributed in a similar way to the Job Retention Scheme, would cover essentials such as rent/mortgage payments, insurance, utilities and waste collection and be paid directly to business owners each month. It would remain in place for the duration of any social distancing measures.

UK Hospitality said the support would “ensure that these businesses will be able to reopen their doors once restrictions allow”.

The groups have also called for continued business rates relief and a reduction in VAT for hospitality, as well as the continuation of the Coronavirus Job Retention Scheme as businesses “begin the process of re-opening and building towards ‘normal’ levels of trade”.

They pointed out that companies will likely have to continue to furlough some of their staff in the early days of operation as they rebuild their businesses.

UK Hospitality said the extent of further financial support will “depend on the timing and extent of the ending of lockdown, the scale and pace that businesses can/are permitted to re-open, continuation of social distancing and the ability of people to travel”.

Colin Wilkinson, managing director of the Scottish Licensed Trade Association, agreed.

He said: “There have been a variety of opinions on how our industry should open and of course we all want to get back into operation as soon as possible, but in reality this is going to take many months, even years, to get back to even where we were before the lockdown.

“With successful re-opening during 2020 looking unlikely, support will be needed until 2021 at least.

“If we are allowed to open, but under such restrictions that it is not viable to open, and government support ceases, then we are in the same horrendously precarious position as our industry is in now.”

And Fraser Campbell, head of family business at chartered accountancy firm Campbell Dallas, said a failure to provide long-term support could cause hospitality and tourism to “shrink rapidly”.

“Without longer term support for substantially diminished demand and capacity, there is a clear risk the size and contribution of the hospitality and tourism sector will shrink rapidly with many thousands of closures and job losses,” said Campbell.