10 Mar 2021
By Stuart Patrick, Chief Executive of Glasgow Chamber of Commerce
Now that we have heard both Scottish and UK budgets and both Scottish and English reopening road maps, how confident should the Scottish business community feel about the weeks and months ahead?
The two main messages I have been absorbing from Chamber member discussions are very clear. For those businesses most severely affected by the lockdown restrictions the first ask has been for some steer on when operations can be expected to resume. The second is for business support to last for as long as restrictions prevent businesses from getting back near to normality.
It had been hoped the Scottish budget in January would be the first jigsaw piece and that the Chancellor’s budget would be the last. It hasn’t turned out that way. We are still hounded by uncertainty.
The Scottish road map remains a disappointing affair despite some more optimistic noises from the First Minister suggesting Scotland’s journey to economic reopening won’t be terribly different to the rest of the UK’s. The only relevant date floated so far is April 26 when the local tiering system is reintroduced, with the hope that every local area will be moving out of the strict lockdown that has been in place since Christmas.
If Level 3 is the strictest tier any area can expect and if that level’s rules are broadly the same as last time, then there is some hope for retail and hairdressers. But shops in Glasgow’s city centre, which after all service the whole city region, will be hoping the more generous health board boundaries are used to set any continuing local travel restrictions rather than just the present Glasgow City Council area.
For hospitality and leisure businesses Level 3 has always been difficult to work with. No operations after 6pm and a ban on alcohol make it unviable for many firms to reopen. There is no scope for a night-time economy that in Glasgow supports 16,000 jobs. For those businesses and for those dependent on travel and tourism and major events production there is no time frame beyond April 26 to plan against. Our airports remain largely in limbo, and non-essential offices have no proposed date for recommencing. So at least in Scotland we are still some distance away from a fleshed out economic road map.
On business support we do have the Chancellor’s commitment to extend the job retention scheme to the end of September but with employer contributions increasing again from the beginning of July.
The extension clearly assumes that businesses are mostly reopened in June and allows some time for demand to rebuild over the summer. If Scotland’s road map diverges from that assumption to any great degree then the consequences for jobs could be severe.
Kate Forbes has trumped the Chancellor with a more generous commitment to business rates relief and has also confirmed a commitment to the continuation of monthly cash grants. We await guidance on how the Chancellor’s restart grants offering one-off payments up to £18,000 to hospitality and leisure companies and up to £6,000 for non-essential retail will affect Ms Forbes’ original plans. We also wait to hear how the £1.2bn Barnett consequentials from the Chancellor’s budget will be used to support jobs.
On Monday advisors BDO in their Business Trends survey reported the highest level of confidence amongst UK service companies – including retail and hospitality – since the pandemic began. The successful roll-out of the vaccine is no doubt the most important factor.
For all Scottish companies to share fully in that confidence it would help enormously if the First Minister tackled their road map concerns soon.
This article was first published in The Herald on Wednesday 10 March 2021