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Covid-19 (Economy)

– in the Scottish Parliament on 18th March 2020.

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Photo of Linda Fabiani Linda Fabiani Scottish National Party

The next item of business is a statement by Fiona Hyslop on the economy and Covid-19. The cabinet secretary will take questions at the end of her statement, so there should be no interventions or interruptions.

Photo of Fiona Hyslop Fiona Hyslop Scottish National Party

As Covid-19 continues to spread globally, there is major uncertainty in financial markets, supply chains and the functioning of the global economy.

The scale of the economic crisis could see gross domestic product shrink by 5 per cent over a three-month period, based on the economy operating at 80 per cent capacity. The 5 per cent hit to GDP is also contingent on most businesses still being able to operate and function during that period.

The overall economic impact is clearly likely to be significant, albeit potentially temporary, but the scale and duration of the impact are difficult to predict. Depressed economic activity this year will have implications for the public finances through lower tax receipts and higher welfare spending. That will have severe economic consequences, and we are treating it as an economic emergency triggered by the enormity of the health emergency.

The Scottish Government has three main aims. The first is to keep companies in business and with productive capacity so that they can recover. The second, related to the first, is to keep staff in employment with appropriate income protection and support. The third and most important aim is to provide support to staff so that they can self-isolate and provide care to loved ones. That is why it is in everyone’s interest—individuals, business and Government—to help companies through this period.

The key impacts on business are through cash flow. However, that is not uniform and some businesses are being impacted immediately, while others will be impacted over a longer period of time.

We are aware of businesses reducing working hours and laying off staff. The pace of that is faster than we would see normally, which reflects the scale of impacts across some sectors of the economy. Our immediate focus is therefore on supporting well-functioning profitable companies that are facing an immediate collapse in demand.

I welcome the further support that was announced by the chancellor, and the Scottish Government will pass all consequentials to businesses to help them through this challenging period. The First Minister has already confirmed that every penny that we receive will go to support Scottish businesses and their employees, and I confirm today that we will replicate the package of measures in full.

We have already confirmed our intention to effectively freeze the poundage rate next year, and I confirm today that we will mirror the package of measures that was announced by the chancellor. That will ensure that small businesses that receive the small business bonus scheme or rural relief will be eligible for a £10,000 grant. We will provide 12 months’ relief for properties in the hospitality, leisure and retail sectors, and we will provide a £25,000 grant for hospitality, leisure and retail properties with a rateable value between £18,000 and £51,000.

Loans are important, but debt is still debt, and we need the United Kingdom Government to help companies with more support. We need an agreed economic framework in place with the UK Government. We must think beyond the last crisis. This is potentially of a greater order of magnitude and a different type of shock.

The Chancellor of the Exchequer talked about a bridge for business but we need more than a bridge; in many cases, we need to protect capacity until demand returns. We need substantial grant support and tax breaks to keep—where possible—companies in business and people in jobs, and a greater emphasis on supporting individuals and households. In particular, today, I ask the UK Government to reduce cost pressures on business through, for example, tax holidays through pay as you earn—PAYE—breaks, VAT reduction and the suspension of the apprenticeship levy; and to review competition policy to ensure that markets remain equitable and regulations are put in place to safeguard consumers from price hikes.

To date, we have had a positive working relationship with the UK Government. I spoke to Alok Sharma, the Secretary of State for Business, Energy and Industrial Strategy, and, at my suggestion, he agreed to a quadrilateral telephone conference with the devolved Administrations, which took place this morning. I will continue to work closely with the UK Government and the other devolved Administrations, because this situation will require a co-ordinated response.

To support the health response, it is important that we repurpose any economy activity or capacity that we can mobilise. It is also vital that fair work principles support the current situation. This morning, I met the Scottish Trades Union Congress and a number of affiliate unions to discuss that.

I want to make clear what the Government expects of itself as an employer, as well as of private, public and third sector employers. Yes, we are in an emergency situation but, if we take the time with unions and our staff to work out what we do, the country will be better off.

Engagement with businesses and unions is crucial. I met the STUC and business leaders on 11 March. We have arranged calls three times a week with business organisations to share information and gather intelligence.

With other devolved Administrations and the UK Government, on 13 March, we launched the Covid-19 helplines to support businesses. That augments the findbusinesssupport.gov.scot website, which is the best way for businesses to find the information that they need. There is also a separate HM Revenue and Customs helpline for tax issues.

We are all operating in an unprecedented, challenging and fast-moving situation, and we need to keep that in mind. In light of the recent announcements, the helpline has been inundated with calls; it has gone from a normal day of approximately 50 calls per day to 100 calls per hour; yesterday, it received around 2,200 calls. The staff at the helpline should be commended for their efforts in dealing with that high volume of inquiries. Most of the inquiries were about new business rates support, and we are working hard to expand the information that is available on the website, so that fewer businesses have to use the helpline to get the answers that they need. We will take that approach as we move forward and we recognise the need to deliver better and at pace.

On 14 March, the Cabinet Secretary for Finance announced the Scottish Government’s £320 million support package, which was an immediate response to the UK budget; it included a mix of rates relief and grants for small businesses. Further details are being worked up and will be publicised as soon as possible.

Our initial, immediate response was well received by business organisations, but more is needed, particularly after Monday’s health announcements. That is why the scale of the response is necessary.

Our support for businesses is not just financial. We are looking at where we can temporarily loosen the regulatory burden on businesses, to enable them to focus their efforts, as much as possible, on business continuity or adaption, so that they can continue to pay their staff.

The chief planner has already written to councils to urge them to relax planning restrictions around delivery hours for supermarkets. Today, he will write to local authorities to urge them not to enforce planning restrictions on pubs and restaurants in order to allow them to operate temporarily as takeaways; that will enable them to adapt their businesses, while allowing people to remain at home in response to Covid-19. The guidance would be kept under review and updated as appropriate.

Having listened to the views of stakeholders, we have agreed to extend the go-live date for the deposit return scheme from April 2021 to July 2022. That will give businesses more time to prepare their premises for the scheme and, crucially, provide flexibility in the immediate term. We have also halted the legislative process for the transient visitor levy, or tourist tax.

The financial support that is needed cannot come from Government alone. We will look to share costs across the public and private sectors in a way that is fair and benefits mitigation but that also benefits prospects for recovery.

We are working closely with the banking sector to ensure that people and businesses are able to access the financial support that they need during this difficult time. The banks have moved swiftly, mobilising £20 billion of finance across the UK. The critical message for citizens and businesses is that anyone who foresees financial challenges in the future should talk to their bank now, even if they are not currently experiencing difficulties. The sooner that the bank is able to understand someone’s situation, the more likely it is that it will be able to help.

We are in urgent discussions with the banks in respect of their contribution to tackling the crisis. The First Minister will convene an emergency meeting of the Financial Services Advisory Board in order to ensure a co-ordinated approach between Government and the financial sector. I will also be seeking an urgent meeting with the insurance industry to discuss how we can work with it to support businesses.

The Scottish Government cannot act alone in the current situation. The Cabinet Secretary for Finance will write to all local authorities urging them to respond positively to requests from ratepayers for payment deferrals for a fixed period. We will continue to work with our partners to ensure that individuals facing redundancy continue to be supported through our partnership action for continuing employment—PACE—initiative

We are already looking at what can be done in the areas of procurement and payment to help relieve the pressure on buyers and suppliers through procurement policy advice, which will, hopefully, help to free up resources to focus on business continuity.

We are working with suppliers to the Scottish Government to assess the impact of coronavirus on the delivery of relevant goods and services, and the extent to which supply contingencies are already in place.

As well as working across Administrations, I am keen to work across party boundaries, given the scale of the situation that we are in. In the first instance, Kate Forbes and I will meet the economy and finance spokespersons of the other parties tomorrow.

Yesterday, my colleague the Cabinet Secretary for Health and Sport said:

“Our nation faces a challenge to our way of life and to public health in a manner that has never been seen before in our lifetimes.”—[

Official Report

, 17 March 2020; c 4.]

That challenge is not just a public health one; it is an economic one as well.

We live in unprecedented times, and collectively we need to work together for the benefit of people and families across Scotland.

The Deputy Presiding Officer:

There will now be questions on the statement; I intend to allow up to around 3 o’clock for that. Those who wish to ask a question should press their request-to-speak buttons.

It has been agreed that questions can be directed to the other cabinet secretaries who are sitting on the front bench just now, so it would be useful if those who are asking questions could let me know which cabinet secretary they would like to respond: the Cabinet Secretary for Transport, Infrastructure and Connectivity; the Cabinet Secretary for Rural Economy and Tourism; the Cabinet Secretary for Finance; or, indeed, the Cabinet Secretary for Economy, Fair Work and Culture herself.

Photo of Donald Cameron Donald Cameron Conservative

I begin by reiterating what Jackson Carlaw said yesterday about support from Conservative members for the Scottish Government’s general approach the coronavirus crisis, and I restate the Scottish Conservatives’ support for the First Minister and her Government as they respond to the emergency. That is especially the case when it comes to the economy and assisting not only Scotland’s business community but Scotland’s workers, wherever they may be.

Last night, the Chancellor of the Exchequer unveiled a substantial package of measures to assist business, including £1.9 billion for the Scottish Government. I acknowledge and welcome the fact that the First Minister has confirmed that every penny of that will be spent on business support.

Some of the actions that have been outlined are applicable UK-wide and others are not. Given that a range of businesses in England will now have, in effect, 100 per cent rates relief, many businesses in Scotland expected the same assistance, so I was pleased and grateful to hear the cabinet secretary confirm that the Scottish Government will adopt an identical approach and will replicate the UK package.

I listened carefully to what the Cabinet Secretary for Economy, Fair Work and Culture said about the helpline, and would like to ask a question of the Cabinet Secretary for Finance. Can she tell us about the mechanics of accessing support, given the need for the process to be fast and straightforward? Businesses large and small urgently want to know whether they are eligible for support, and they want to know how, where and when they will be able to access it. Can the Cabinet Secretary for Finance give more details on that?

Photo of Kate Forbes Kate Forbes Scottish National Party

I thank Donald Cameron for his question and his reiteration of his willingness to work on a cross-party basis. When it comes to cross-Government work, we are trying to replicate on the financial side the good work that is already taking place on the operational response to the coronavirus.

On the specific questions that Donald Cameron has asked, my colleague Fiona Hyslop has confirmed that we will mirror what was in the announcement that the UK chancellor made yesterday. I confirm that details will be put online so that businesses can identify quickly and easily whether they are eligible. We will use the rates system, as the English local authorities will, to distribute the grants as quickly and effectively as possible—the £10,000 grants for all small businesses that are in receipt of the small business bonus or the rural bonus, and the £25,000 grants for businesses in the hospitality sector, with that being defined, again, by the rates system.

Rates relief will be relatively automatic, because it will come into force on 1 April, which is when businesses would be getting their bills, anyway. That will be for businesses in the hospitality, leisure and retail sectors. There will be a list online for businesses to use to identify whether they are eligible for the reliefs.

We are moving as quickly as possible to ensure that the resources will be distributed quickly. It is quite an operation to ensure that the businesses will get the resources that they need quickly, but I hope that further information will be online imminently so that businesses can check whether they are eligible.

Photo of Richard Leonard Richard Leonard Labour

I, too, welcome the statement by the Cabinet Secretary for Economy, Fair Work and Culture and her recommitment to taking a cross-party approach, which Labour members will certainly reciprocate.

We said last week that we welcome the extension and underwriting of statutory sick pay to small business employees who self-isolate, but, of course, £94.25 a week is not enough to live on, so we want the Scottish Government to consider topping it up.

The cabinet secretary spoke in her statement—I think that I quote her correctly—of “staff in employment”, but she will know that not all staff in employment are employees.

My question is about the people, a quarter of a million of whom are in Scotland, who are part of what is now known as the precariat—the self-employed delivery drivers, the zero-hours hospitality workers and the agency workers in factories across Scotland with unstable hours. What support can the Scottish Government give them when they self-isolate, when they are laid off with no work, or when they have to take time off to look after children—who, from next week, will be unable to attend school or nursery?

Photo of Fiona Hyslop Fiona Hyslop Scottish National Party

I made it clear in my statement that more needs to be done than tackling the business rates issue through grants, however strong that package is. That is precisely because of the points that Richard Leonard makes. It is clear that self-employed people and freelancers, as well as people who are in precarious contracts, have real and distinct needs. Some issues can be dealt with by the hardship fund that has already been announced, and additional information will be made available tomorrow in statements by Cabinet colleagues.

However, in terms of a package that is particular to the people whom Richard Leonard mentioned, I think that two things need to happen. In response to his first point, I say that eligibility for statutory sick pay is required. The lowering of the ceiling for access to benefits via Jobcentre Plus is welcome, but there will be people who are still earning above a certain amount who are not eligible for benefits, which will have to be addressed.

We are, for businesses through the grants system, operating quickly with the resources that we have in order that we can help to support people who are in employment. However, when I met the Cabinet Secretary for Finance yesterday, I agreed that we need to do something specific for self-employed people and freelancers.

I take the opportunity to say that I expect money from the public sector to remain in the systems where contracts are deployed. For example, Creative Scotland, which operates in an area in which there are many self-employed artists and freelancers, is looking at ways to keep money in the system in order to honour contracts and ensure regular incomes.

There is more to be done by the Scottish Government, and there is also a requirement on the UK Government. That is one of the issues that I addressed in the quadrilateral meeting at which I spoke to a UK Government minister, this morning.

The Deputy Presiding Officer:

We move to open questions. Many members want to ask questions. I call Andy Wightman, followed by Alex Cole-Hamilton.

Photo of Andy Wightman Andy Wightman Green

I thank the cabinet secretary for her statement. My question is for the

Cabinet Secretary for Economy, Fair Work and Culture

.

In the current crisis, we need a special focus on businesses that are critical. We need to focus on business continuity and, above all, we need to focus on providing a basic income for everybody in the workplace. The UK’s announcement yesterday about loan guarantees is useless for the many businesses that will be unable to get a loan because of their cash-flow forecasts. Non-domestic rates relief is useless for self-employed people or small business enterprises that do not pay non-domestic rates anyway.

Can the cabinet secretary explain why she said in her statement that she intends to replicate the UK package in full, when much of it, I argue, is not strictly relevant, nor does it prioritise ensuring that our economy comes out at the end of this focused on priority businesses, focused on continuity and focused on providing a basic income for everybody?

Photo of Fiona Hyslop Fiona Hyslop Scottish National Party

Despite the scale of what was announced by the UK chancellor yesterday, there is more to be done. We can do things differently. With regard to Saturday’s announcement, we have already been more flexible with regard to what is required from the Scottish Government. Indeed, the statement by the Federation of Small Businesses and interview this morning indicated that there are things that we can and should do differently—I absolutely appreciate that.

On incomes, we need to explore realistically—I also raised this in the quadrilateral meeting of economy ministers this morning—a system of wage support that will maintain people in employment until such time as the capacity of companies can be restarted, should there be, as we might anticipate, downturns in some areas. Andy Wightman’s question was quite specific, and what we do has also to apply to people who are not in employment. In that respect, there must be co-ordination between the UK benefit system and what we can do here within our limited welfare powers. My colleagues are considering what we can do through the hardship fund and other Scottish Government activities.

We cannot do everything immediately, but we have started at pace. Because of the scale of what we are doing and the pace with which we need to respond, we need swiftly to get as much resource, in terms of cash and revenue, into the system, and we need the capacity to respond flexibly to specific needs such as have been identified by Andy Wightman and Richard Leonard.

Photo of Alex Cole-Hamilton Alex Cole-Hamilton Liberal Democrat

I restate that the Liberal Democrats fully support all the work of the Scottish Government at this time of national crisis. Edinburgh Airport provides 7,500 jobs in my constituency and sustains a much wider ecosystem of businesses across Edinburgh and Scotland. The impact of the virus will decimate its business to the point of unviability, and it is not alone. 21CC is an events company that has seen £2 million of turnover wiped out overnight. Corstorphine village playgoup, a charity that employs only five childcare workers but sustains other people to go work, is on the verge of collapse. They are examples of all kinds of business, along with taxi drivers, fitness instructors and hairdressers, that have been in touch with me in the past 24 hours and which all face an existential threat that will force them to shed staff if urgent reassurance is not given to them. Can the Cabinet Secretary for Economy, Fair Work and Culture confirm that the measures that have been described will help all those businesses survive, be they a company, charity or sole trader?

The Deputy Presiding Officer:

The member has asked that the

Cabinet Secretary for Economy, Fair Work and Culture respond.

Photo of Alex Cole-Hamilton Alex Cole-Hamilton Liberal Democrat

I am happy to hear from whoever feels best placed to respond.

The Deputy Presiding Officer:

I hesitate to say who feels most able.

Photo of Kate Forbes Kate Forbes Scottish National Party

The brief point is that a number of the businesses that Alex Cole-Hamilton has mentioned will indeed be included in the specific relief measures or grant measures that have been announced today. However, he has touched on a number of other businesses; it is worth putting on record that, as four cabinet secretaries and more, we are working as a team to support all the businesses that will be impacted by the coronavirus. That includes the conversations that Michael Matheson has been having with Edinburgh Airport, for example.

We want to ensure that we work at pace. We have moved very quickly since yesterday’s announcement to ensure that there is support in place for Scottish business and people. However, clearly, there is more to be done, and we are keen to work on a cross-party basis to understand the concerns that members have and to respond appropriately.

Photo of Maureen Watt Maureen Watt Scottish National Party

Last night, I was contacted by a creel fisherman who is based in my constituency. He raised the concern that much of the fishing industry will not qualify for business support grants given that many businesses do not pay rates as they have no onshore premises. What support will be available for such businesses in the fishing industry?

Photo of Fergus Ewing Fergus Ewing Scottish National Party

Maureen Watt is absolutely right to raise that issue—as members from all parties have—which is, primarily, about inshore fisherman and their crew, and shellfish businesses and processors who have suffered enormous economic shocks. Even before the virus, the loss of the brown crab market in China caused massive damage to many businesses, particularly in the shellfish sector. This crisis has exacerbated that.

I am able to confirm two things to Maureen Watt. The first is that I had a conference call with around 30 stakeholders who represent the whole of the fishing sector, during which we discussed a wide range of issues. Secondly, this morning I pursued discussions with officials and we are working hard on a package of support to be given directly to those who will need it most. Obviously, we need to work up that package specifically for the fishing sector. Maureen Watt referred to the fact that many of those businesses do not have an office or shop or any bricks-and-mortar premises. However, they do have a fishing vessel, and often those vessels are subject to loan commitments that are required to be paid. This is a different sector, and it needs to be treated very sympathetically. We are doing that. We are working on a package.

Presiding Officer, with your permission, I hope and expect to come back to the chamber as soon as I can with details to ensure that those people around the country who are suffering in the fishing sector, particularly the inshore sector, receive sufficient financial support to tide them over for the duration of this crisis. One of the challenges is that none of us knows exactly how long that duration will be.

Photo of Maurice Golden Maurice Golden Conservative

How will public procurement, including via Government agencies and funded organisations, be used to pump prime the economy to support businesses, contractors and the third sector?

Photo of Kate Forbes Kate Forbes Scottish National Party

As Fiona Hyslop said, we are very mindful of the fact that procurement can keep money in the system. Therefore, our commitment is to ensure that we continue to honour contracts. We already pay 98 per cent of invoices within 10 days of receipt, and we are testing our payments processing systems to ensure that that level of performance can be maintained in the light of any direction to work from home, rather than at the office.

Photo of Willie Coffey Willie Coffey Scottish National Party

I ask the

Cabinet Secretary for Economy, Fair Work and Culture how we and the wider public can support our local businesses better to help them maintain their cash flows at this difficult time?

Photo of Fiona Hyslop Fiona Hyslop Scottish National Party

Everybody understands that there are immediate pressures in that well-functioning organisations and businesses face a collapse in demand.

We have seen fantastic community responses, with people ensuring that the elderly can be supported in many different ways. However, if you have a local business that you want to see survive and continue to exist on your high street, in your town, please think of buying a voucher for future use. It could be a voucher for a restaurant where you want to eat a meal when all of this comes through and we want to get back together with friends and family. You could buy a voucher for your hairdresser, or wherever you want. Everybody can do something if they have cash, a salary and the capability to buy a voucher—people are saving money because they are not going out—please think of buying vouchers that support your local community. We can have a community social response, and we can also have a community economic response.

Photo of Rhoda Grant Rhoda Grant Labour

May I ask for clarification on whether replicating UK business support includes 100 per cent rates relief for companies with a rateable value under £51,000? Will levers be attached to business support and assistance to protect jobs and ensure that the benefits are passed on? I am thinking, for example, of mortgage holidays in the buy-to-let market.

Photo of Kate Forbes Kate Forbes Scottish National Party

I confirm that rates relief for all businesses in hospitality, leisure and retail applies irrespective of threshold.

Of course, we made the announcement on Saturday that it would extend to those under the rateable value threshold of £69,000, but our announcement today confirms that all businesses in those three sectors will get that relief. That overrules the commitment that was made on Saturday.

We have been clear in our engagement with business, in our announcements and in considering this relief package that we do not expect this package of support to extend only to business structures; it must be used to protect jobs and ensure that employees have money in their wallets and the support that they need.

A lot of work is going on with the banks, in particular, to ensure that, when it comes to mortgages, debt arrears and other things, the banks are sympathetic on payments. Ms Hyslop will meet the banks next week to discuss how we can work together to support people.

Photo of Kenneth Gibson Kenneth Gibson Scottish National Party

A crisis brings out the best in some people and the worst in others. In my constituency, Scotland’s largest producer of alcohol-based sanitising gel, TR Bonnyman, Son & Company, has seen the price of alcohol that is supplied to it rocket from £500 per tonne to £3,500 per tonne. What steps will be taken to tackle individuals and companies that are allegedly profiteering from the impact of Covid-19?

Photo of Fiona Hyslop Fiona Hyslop Scottish National Party

When I spoke to the secretary of state yesterday, one of the issues that I raised was the potential for and therefore the need to prevent price hikes in energy and other areas.

The example that Kenneth Gibson gave shows that there are people who want to exploit people and companies in very difficult circumstances.

I commend, in particular, the distilleries that are redeploying their equipment for use in relation to hand sanitisers, which is a good example of businesses responding positively.

Exploitation of the economy at this very difficult time is absolutely inexcusable. Everybody has a responsibility to support businesses, and anything that can be done in relation to competition policy and to ensure that such activity does not happen must be done. That is something that we will continue to monitor.

The member may forward his example to us and we will see what powers to regulate we or the UK Government have to try to restrict such unacceptable behaviour during an economic emergency.

Photo of Murdo Fraser Murdo Fraser Conservative

I am sure that I am not the only member who has been contacted by local businesses expressing concern about the time that it is taking to get through on the Government’s helpline. Indeed, some people have given up altogether.

Given the importance that is attached to the line, will the Scottish Government look at increasing the resources that are available to it? I know that the people who are working on the helpline are working very hard already, but can more staff be allocated and can the helpline’s opening hours be extended into the evening or perhaps the weekend, so that businesses can access the information that they are desperate to get?

Photo of Fiona Hyslop Fiona Hyslop Scottish National Party

The helpline was launched only last Thursday—less than a week ago—in conjunction with the UK Government; there is a dedicated Scottish helpline, which identifies support in Scotland.

The announcement that was made on Monday—less than 48 hours ago—has precipitated considerable concern and business expectation. There was also the announcement, only on Saturday, of the immediate response to the budget.

We completely understand that people want to access information. Yesterday, I spoke to Scottish Enterprise, after a number of members had contacted me, to ensure that it is scaling up activity, in terms of the available resource.

I take the member’s point about the helpline being a critical service, which people need to be able to access. I have talked about the sheer scale of activity in terms of the number of calls. We are committed to constantly updating and improving the information, even as of today. We will also make sure that there is the capacity for people to get responses when they need them. People will have to bear with us. We are going through an economic emergency and the service is scaling up at pace. We should thank the people who are providing that service for us, as I appreciate Murdo Fraser has just done.

Photo of Pauline McNeill Pauline McNeill Labour

This is probably a question for the Cabinet Secretary for Economy, Fair Work and Culture.

Glasgow has the largest number of pubs and clubs outside London, involving thousands of jobs. Many young people in the industry are on part-time contracts. I am sure that the cabinet secretary is aware that the sector feels that it does not know what to do this weekend when people are being advised not to go out but pubs and clubs will still be open for business. Will there be any more clarity on that towards the weekend?

Could the cabinet secretary publish the current rules on staff lay-offs? If staff can get continuity of employment when we get to a really difficult point, it will be better for them than being dismissed from their employment, because they will retain their employment rights.

Photo of Fiona Hyslop Fiona Hyslop Scottish National Party

The point about fair work is absolutely critical. We need to keep as many people as possible in employment. When that is not possible, we have to find a way of supporting businesses through wage subsidies. There is no scheme for that at the moment, but I think that that is where we will end up

I know that insurance is a major issue. From my conversation with the UK Government this morning, I understand that John Glen, the relevant minister, has had reassurance from insurers that they will honour contracts where there is provision for a pandemic. That might not necessarily affect everyone; it depends on people’s insurance policies. That is a bit of progress that has been made since yesterday, and it might allay some of the concerns that a lot of the clubs have.

On Pauline McNeill’s point about rules and regulations, employers should absolutely support the employment contracts that people have already and honour their responsibilities under employment legislation. By giving businesses the confidence that they can continue for the next few months, the measures that we have taken are considerable. The rates relief for the hospitality industry for the year and the £25,000 grant will be very important measures for many areas. They will give people a bit of confidence, time to plan and time to talk to their banks to see what is possible so that they can continue their relationship with the many young people who work in that very important sector.

Photo of Alasdair Allan Alasdair Allan Scottish National Party

In many constituencies such as my own, where the tourism and hospitality sectors play a major role, there is widespread anxiety about the economic consequences of the Covid-19 outbreak. I spoke to one small business in the islands on Tuesday that had just taken 70 cancellations in the space of one hour.

This is all coming at the worst possible time of year for cash flow. As things stand, many tourism and other businesses are wondering how they can get through the outbreak financially. I ask the Cabinet Secretary for Economy, Fair Work and Culture what can be done to direct people quickly to sources of Scottish and UK Government help, particularly in tourism-dependent areas of the country.

The Deputy Presiding Officer:

The Cabinet Secretary for Economy, Fair Work and Culture would prefer the Cabinet Secretary for Rural Economy and Tourism to answer your question, if that is all right.

Photo of Fergus Ewing Fergus Ewing Scottish National Party

Dr Allan raises an important question about issues that affect a great many people throughout the country in the tourism, hospitality and leisure sector. Quite simply, many businesses operating in that sector have lost all their revenue: there are no visitors, and things have shut down. That means that we need to help those businesses survive and get through this period.

That is why I very much welcome the specific measures that have been announced for businesses in hospitality, leisure and retail, including the small business bonus rural relief grant of £10,000 and the £25,000 grant for hospitality, leisure and retail properties with a rateable value of between £18,000 and £51,000. Those measures go far more towards what is required than the UK Government’s initial response did. I do not say that with any criticism: it is a developing scene, and it is now obvious that the initial UK response was not adequate and has been substantially enhanced.

We will continue to listen very carefully to Dr Allan’s constituents and others over the coming days to make sure that we know what is required to protect and preserve those great businesses in this important sector—arguably, it is the most important sector of the Scottish economy by some measure—particularly with regard to their staffing needs and the interests of their staff, in respect of which we believe, as the Cabinet Secretary for Economy, Fair Work and Culture has already indicated, more needs to be done.

We will listen very carefully, but I hope that today’s announcement will go some considerable way towards providing hope for people involved in those businesses, many of whom, quite frankly, have had very little sleep over the past week from worrying about the future and the survival of businesses that they have spent their lives building up.

Photo of Alexander Burnett Alexander Burnett Conservative

Some people are taking their own view of the use of cash, with some shops taking cards only. However, some shops cannot take cards or electronic payments, particularly in rural areas, and some groups of people, particularly the elderly, rely on cash.

Will the Cabinet Secretary for Finance advise what conversations she has had with banks to ensure the continued circulation and availability of cash, particularly in rural areas?

Photo of Kate Forbes Kate Forbes Scottish National Party

That is part of a much broader conversation that I have regularly with banks around the provision of cash and, in particular, the reduction of free-to-use ATMs in rural areas. In the past, I have met the Payment Systems Regulator and Link, in order to ensure that people still have access to cash without the need to pay for it. I am also working with businesses to ensure that they continue to take cash, because businesses and individuals, particularly in rural areas, are dependent on it. People need to be able to access cash and they expect businesses to take cash, so we will continue to have that conversation.

Photo of Jackie Baillie Jackie Baillie Labour

I, too, have a number of tourism-related businesses in my constituency, including hotels, visitor attractions and cruise operators, which are reporting large-scale cancellations. Their immediate concern is cash flow and their ability to pay the wages of existing staff. Although the measures that have been announced go so far, the rateable value of many such businesses is above £51,000.

Given that the Government advice is not to travel and to stay away from restaurants and pubs, the problem has been made worse. There also appears to be little prospect of insurance companies paying out. What urgent measures will the Cabinet Secretary for Rural Economy and Tourism put in place to ease cash flow, so that staff can be paid?

Photo of Fergus Ewing Fergus Ewing Scottish National Party

Jackie Baillie is quite right to raise those matters. The cruise sector operates in a number of constituencies, including mine, and has been a notable success. It is very important to ensure that it gets commensurate support, which we believe should be achieved through the measures that were announced by the Cabinet Secretary for Economy, Fair Work and Culture.

I can meet Jackie Baillie to continue the discussion.

We all recognise that the announcement has been made in emergency circumstances. We have announced today that we will replicate in full the support that was announced by the UK chancellor yesterday. We all recognise that, in a 24 or 48-hour period, we cannot provide all the answers. However, we are absolutely determined to be open and transparent and to work with all members across all parties as quickly as we can to make sure that no one who has suffered the effective cessation of their business or a substantial diminution of their revenue will be left without financial support. That is the key message that we are determined to convey and to deliver on.

Photo of Annabelle Ewing Annabelle Ewing Scottish National Party

I have a question for the Cabinet Secretary for Rural Economy and Tourism on supply of goods. People are worried about the lack of paracetamol in our shops and supermarkets. Can the cabinet secretary provide assurances regarding distribution arrangements?

Photo of Fergus Ewing Fergus Ewing Scottish National Party

I have had two conference calls with supermarkets in the past week. I reiterate what I said in the chamber yesterday: the response of supermarkets and the broader retail sector has been excellent. They are determined to ensure continuity of supply of all vital foodstuffs, sanitary products and other necessities of life. As yet, I have not specifically raised the important issue that Annabelle Ewing asked about, but I will now do so in order to ensure that there is a sufficient supply of such products, on which many people rely, particularly at this time.

Photo of Colin Smyth Colin Smyth Labour

As the cabinet secretaries for economy and the rural economy have both said, the announcement advising people to avoid restaurants and pubs, for example, has had a devastating impact on the food and drink sector. Rates relief is obviously welcome, but the economic tsunami in that sector at the moment means that many businesses—in particular, the small ones—will go bust, or will at least lay off staff within a matter of weeks, if not days.

Are all the Governments considering a scheme that is similar to the one that has been proposed in Ireland, whereby businesses are being paid €203 per week to keep on staff who would otherwise have lost their jobs as a direct result of the health advice that people should not use those businesses? Is a similar scheme likely to happen?

Photo of Fiona Hyslop Fiona Hyslop Scottish National Party

There are two points to make. First, I reiterate that we are providing 12 months of rates relief for properties in the hospitality, leisure and retail sectors, and we will provide a £25,000 grant to hospitality, leisure and retail properties that have a rateable value that is between £18,000 and £51,000. That will capture a great number of businesses.

Colin Smyth’s point about how we can keep people in employment is absolutely crucial. Yesterday, I spoke to Ken Skates of the Welsh Government, who was part of the quadrilateral discussion, and I have spoken to Diane Dodds, who is the Northern Ireland economy minister. We are all in agreement that the UK Government has to work with us on a cross-Administration basis so that we can understand what we can try to do to keep people in employment.

We have responded rapidly. After the budget announcement last Thursday, a package was announced by Kate Forbes on Saturday. After the announcement only yesterday evening by the UK chancellor, we have responded immediately with a commitment to replicate all the measures in relation to rates relief, but we accept that there is more to be done.

More needs to be done to ensure that we have a system for small and medium-sized businesses—especially restaurants and other parts of the hospitality sector, which is the most immediately affected industry, although other areas will also be affected—that will enable people to stay in employment and will support their incomes. I am not saying at what level that would be set or what scheme would be used. Other countries have set different levels. Such a scheme would help: I am determined to continue to find, in my discussions with the UK Government, a route to that.

Some businesses will have to close, for various reasons, but that need not mean that the business must end or that employment with it has to end. Let us find a way through this very difficult situation, and let us understand that there will be an end in sight. On that basis, we can make sure that there is support to keep businesses operating and employees working, with their incomes being supported.

Photo of John Mason John Mason Scottish National Party

I do not mind which minister replies to this question. Quite a lot of assistance is being targeted at small businesses, particularly in the hospitality and leisure sectors, and rightly so. However, what will happen for larger businesses, such as hotel chains. Will they have to turn to Westminster for loans, or can we help them, too? What about businesses in other sectors—for example, the international summer school that is based in Glasgow?

Photo of Kate Forbes Kate Forbes Scottish National Party

There is other support in place. The UK chancellor announced yesterday, for example, that there is larger corporate loan support, and that the UK Government is expanding the business interruption loan scheme, which will be available for larger businesses.

What we are doing is important at the moment and includes targeting our support at the businesses that need it most urgently, right now. We fully expect that the economic impact will fall on small businesses, large businesses, businesses in rural areas and businesses in urban areas. Therefore, it is clear that regardless of where we target our support right now, support will need to continue in order that we can meet the challenges ahead.

Photo of Patrick Harvie Patrick Harvie Green

The health response is very much focused on flattening the curve of infections. Surely our economic response needs to flatten a different curve. The economic impact will fall most heavily on the people in our society who do not have the broadest shoulders. The last economic crisis hit the most vulnerable people hardest. We must ensure that the crisis that results from the virus does not also exacerbate inequality.

Why can we not ensure that the business support packages that are available are contingent on fair work practices? Precarious workers are being left on the scrapheap right now, already this week. Why is replication in their entirety of the United Kingdom’s policies the right way of achieving the protection that many businesses are simply not offering?

Photo of Fiona Hyslop Fiona Hyslop Scottish National Party

Patrick Harvie has raised a very important point. We made it clear in our statement on Saturday, when we announced the immediate response to the budget on support for businesses, that we expect the fair work principles to be implemented by businesses. Indeed, going forward, Scottish Enterprise will award grants in its post-April activity in that context.

I make it clear that we have to get cash and resources out to businesses quickly; the rates system is the quickest way to ensure that we tackle the cash-flow issue.

I absolutely agree about trying to ensure that we support people. That is part of my instruction, as an employer who is part of the Government; I expect public agencies and others to support, in relation to the fair work principles, the system that we have put in place.

On Patrick Harvie’s question about supporting vulnerable individuals who might immediately be facing hardship, that will be the subject of a statement to be given tomorrow, which my Cabinet colleagues Aileen Campbell and Shirley-Anne Somerville have been preparing for in order that they can give their responses on what they can do in that territory. We have to help swiftly, and we do not want bureaucracy to tie up contingent grants. However desirable bureaucracy might be, it would stop people accessing resources.

I make it quite clear that, where we can, we will ensure that the fair work principles are carried through in distribution of public money. However, we are in an emergency, and we have to work swiftly. That is why we are taking the action that was described in today’s announcement, which follows extremely fast on the UK chancellor’s statement yesterday, to give businesses confidence that they can see themselves through this extremely difficult situation.

Photo of Willie Rennie Willie Rennie Liberal Democrat

Will the supply chain of the hospitality sector be included in the support for that sector? The laundry company Fishers Services Ltd employs hundreds of people who service hotels across the country, and its trade has absolutely plummeted. Will it get business rates support?

Fishers laundries are operating under capacity just now, and I imagine that national health service laundries will soon be incredibly busy. Is there the potential for that business to work for the NHS? Can the cabinet secretary have a word about that with the Cabinet Secretary for Health and Sport?

Photo of Kate Forbes Kate Forbes Scottish National Party

Willie Rennie mentioned a laundry business. It would be classified as retail, so the company could be in receipt of the £10,000 small business grant if it is already in the small business bonus scheme. It will also pay no rates, because rates relief will apply to everybody in hospitality, leisure and retail, irrespective of the thresholds. That includes laundry services.

We are considering redeployment. As I said earlier, we are approaching the issue as a team of cabinet secretaries. We are looking at various areas and we are working together collaboratively to ensure that opportunities to redeploy are taken at pace.

Photo of Gordon Lindhurst Gordon Lindhurst Conservative

Will the cabinet secretary provide assurances that, as well as employed and self-employed people, people who operate as subcontractors will receive help and assistance? I am thinking in particular of people who work in the personal and social care sectors.

Photo of Fiona Hyslop Fiona Hyslop Scottish National Party

I made it clear in my statement and in my answers that, in terms of public sector procurement, contracts must be honoured to ensure that the system is in place to support different areas. Subcontracting is a clear example, in that context.

It is absolutely imperative that we support all businesses in all sectors, but it is clear that we have to prioritise. A nybody who supports the front-line response to Covid-19 in social care and health has to be a priority; obviously, there are companies that subcontract social care services.

I emphasise that the Cabinet Secretary for Health and Sport has clearly prioritised not just health, but social care. That includes everybody who is involved. Obviously, there is public delivery by local authorities, but some local authorities contract their provision. We must ensure the economic health of that sector in particular, in order to ensure that delivery of services that we all need and rely on for our friends, families and neighbours can continue.

Photo of Stuart McMillan Stuart McMillan Scottish National Party

My question is for the Cabinet Secretary for Economy, Fair Work and Culture. The cabinet secretary spoke earlier about the business support phone lines. Can she provide further information regarding timescales for the extension of that support, and are there any other means of communication that businesses can use to get information about the support that is available?

Photo of Fiona Hyslop Fiona Hyslop Scottish National Party

A lot of the information that people are seeking is available online. As part of the support services, I have already referred to the deliberate efforts by Scottish Enterprise in recent times to streamline that information so that there is a single portal through which people can access information.

I encourage people to look online first, because, as I said, a lot of the information that they are looking for will be available there. I am acutely aware of the extreme ramping up that is required for that service given Monday’s announcement, which was made, quite understandably, for health reasons. That announcement has had immediate implications for the economic issues that face individual businesses. I gave assurances earlier that I have spoken to the chief executive of Scottish Enterprise, who assured me that it has ramped up its service and will continue to do so. I would also refer people to findbusinesssupport.gov.scot, as I identified during my statement.

The Deputy Presiding Officer:

I will let this session run on a little, but I would ask that members are quite quick with their questions because there are still a number of questions to get through.

Photo of Lewis Macdonald Lewis Macdonald Labour

This is a question for the Cabinet Secretary for Transport, Infrastructure and Connectivity. We have heard from health ministers that testing for clinical care workers will be made available as soon as possible to allow those workers who have shown symptoms but are not infected to return to work. Once that has been achieved, does the Government have any such plans for key workers in sectors such as transport and logistics, particularly those who work with essential goods and the production and supply of energy?

Photo of Michael Matheson Michael Matheson Scottish National Party

Mr Macdonald raises a very important issue. We are undertaking work to identify key workers in a range of different sectors who are critical to our transport and logistics system in order to maintain good connectivity. Everyone within the sector recognises the central role that our transport system plays in helping to support communities, individuals and our economy.

Our focus at present is on ensuring that we keep the country moving as best we can in very challenging circumstances. A number of elements are absolutely critical to continuing to maintain good transport connectivity and a number of the workforce play an important role in making sure that that is maintained. The Government is going through a process to identify key workers so that we have a good understanding of those who would require prioritisation, should the circumstances arise.

I can give the member the assurance that we recognise the importance of that across a number of different areas, including our energy sector, so that we can ensure the provision of energy supplies. That work is on-going and will be considered overall as part of the Government’s resilience strategy.

Photo of Sandra White Sandra White Scottish National Party

I do not mind whether my question is answered by the Cabinet Secretary for Finance or the Cabinet Secretary for Economy, Fair Work and Culture. The Glasgow Kelvin constituency, which I represent, is home to many pubs, clubs, restaurants, and small and large businesses, as well as freelancers and creative industries. Many of those businesses are closing down and many people cannot pay their rent. Is there a timescale for the Government’s help to be delivered and what specific help can the Scottish Government give to self-employed individuals and freelancers who do not fit the specific categories that were mentioned earlier?

Photo of Kate Forbes Kate Forbes Scottish National Party

The timescale is as soon as possible.

As I mentioned, the fastest way of getting out either grants or relief, which will obviously help with cash flow, is through the rates system. We are working with local authorities and assessors to try to mobilise the mass distribution of support as quickly as possible.

Sandra White mentioned clubs and pubs, which, along with music venues, cinemas, studios and galleries, are all classified as retail and therefore would qualify for 100 per cent rates relief, irrespective of their rateable value. Some of them will also be small businesses and so will get the £10,000 grant. We recognise the huge challenge facing those businesses and we want to get the money to them as quickly as possible. We need to do that in a way that is not burdensome or bureaucratic, which is why we are working through the rates system.

Photo of Brian Whittle Brian Whittle Conservative

To follow on from the question about the creative industries, I want to ask about support for the film production industry, which has been severely hit. I have been contacted by a company that still has staff to pay and still has significant payments to make to freelance journalists, but which has found a healthy order book turned into zero turnover, which means that the company now has no collateral to borrow against. A significant package is required to maintain that sector, because it is in danger of disappearing. What advice does the Cabinet Secretary for Economy, Fair Work and Culture have for it?

Photo of Fiona Hyslop Fiona Hyslop Scottish National Party

It is clearly a key sector. In my discussions with the unions this morning, the Broadcasting, Entertainment, Communications and Theatre Union position was raised with me. Creative Scotland is working on what it can provide through its system, and it is important that we recognise that freelancers, particularly in that area, are supported. The sector will be covered as part of the leisure provisions in the rates relief that we have just discussed and through any grants that are available, depending on the size of the business.

Photo of Joan McAlpine Joan McAlpine Scottish National Party

I, too, am looking for details of what is available to the culture sector and, in particular, freelance practitioners, most of whom have already had most of their work cancelled. I would also like to know whether social enterprises and charities will qualify for support to survive the crisis, given that they, too, contract many people in the arts and culture sector and across the economy.

Photo of Fiona Hyslop Fiona Hyslop Scottish National Party

Clearly, rates relief exists for social enterprises and charities, and information on additional support for them will be covered as part of the social side of the response. In relation to freelancers and those who have had contracts cancelled, I make it clear that Creative Scotland is working on a scheme by which support to carry out work that now cannot be experienced, performed or seen by others can still be honoured. Creative Scotland will want to respond on how it will do that, but that is an important principle. Keeping money in the system for individuals is the key priority in what we are trying to do. We can do that for businesses through rates relief, and there are other means by which we can do it.

Photo of Claudia Beamish Claudia Beamish Labour

My question is for the Cabinet Secretary for Finance

. Like other members, I have constituents who are on insecure and even verbal contracts, who are struggling to understand what rights they have. I note and welcome the helpline that has been set up for businesses. Has the Scottish Government considered setting up something similar to assist employees and the self-employed?

Photo of Kate Forbes Kate Forbes Scottish National Party

In many ways, some of those questions will be answered when Aileen Campbell gives a statement on the response for charities, social enterprises and individuals. Part of our commitment was to a hardship fund to ensure that there is support. For example, where there are costs around council tax, that will ensure that council tax reduction can help with those costs. We intend the package to be a significant package of support for businesses in order to keep people in work, as well as for self-employed people and those who work on a freelance basis to help with their costs.

On the banking response, obviously a number of welfare provisions are reserved to the United Kingdom Government, and we continue to work with it to ensure that as many people as possible are supported. We are also working with the banks to ensure that, where there are issues with debt arrears and other matters, the banks work sympathetically with people and do not require payments to be made.

Photo of Bob Doris Bob Doris Scottish National Party

My question is for the Cabinet Secretary for Finance. I have been contacted by a constituent who works for an English language teaching school. Understandably, the school has lost many students and is in financial peril, but it does not believe that it will be covered by the rates relief holidays that have been announced. Because of the nature of the buildings that such schools are in, many of them will have rateable values above £51,000 and so will not qualify for additional relief.

I am told that the schools in the sector employ 390 people directly and 2,560 people indirectly. What can the Scottish Government do to support that important sector?

Photo of Kate Forbes Kate Forbes Scottish National Party

It is clear that nurseries face similar issues, which are having a significant impact. We are actively looking at that to ensure that support goes as far as possible.

One of the announcements that I made on Saturday was about ensuring that there was not an uplift in the poundage, so that nobody pays more tax next year. That covers all properties. It is clear that more help is needed in the case that Bob Doris mentioned, and I would be happy to speak to him further about what support we could put in place to help the English language school in question.

The Deputy Presiding Officer:

Three members still have questions. If they are concise, we will get them all in.

Photo of Claire Baker Claire Baker Labour

The Cabinet Secretary for Economy, Fair Work and Culture said that we face a challenge to our way of life, and she will know that the widespread closure of cultural venues and the cancellation of performances is having an immediate impact on the viability of those venues and on the freelance creative crew and performers. As she said, Creative Scotland has made initial announcements and has secured existing awards, but is there scope for Creative Scotland’s funding to be urgently refocused and directed towards individuals? Will additional resources be made available to support that?

Photo of Fiona Hyslop Fiona Hyslop Scottish National Party

As I said previously, Creative Scotland is responding, and I think that, once it is in a position to do so, it will make clear what provision it will make available to protect individuals and to make sure that the regularly funded organisations are flexible.

Our national companies and national collections are directly responsible to the Scottish Government. It is clear that they will not be able to meet their grant conditions in the way that we would have wanted them to, but we want to make sure that resources are still there so that they can pay individuals and ensure that individuals still receive the income that they need. That approach applies right across the board in the culture and heritage sector, not just to Creative Scotland.

Photo of Alex Neil Alex Neil Scottish National Party

I ask the economy secretary to look at the issue whereby North Lanarkshire Council has told the contractor to stop the contract for installing safety equipment such as fire sprinklers and alarms in houses on Friday. That will result in 100 redundancies and many apprentices losing their apprenticeships. Will the cabinet secretary talk to North Lanarkshire Council to find out whether there is a way in which that essential work can continue, that the jobs can be saved and that arrangements can be made to ensure that nobody is put at unnecessary risk?

Photo of Fiona Hyslop Fiona Hyslop Scottish National Party

Mr Neil raises a very serious issue, which I will be more than happy to look into if he will correspond with me to outline what it is. There is an issue around procurement and contracting. It is incumbent on the public sector to honour its contracts to ensure that companies can keep themselves in business and their employees can keep their jobs.

As the issue that Mr Neil raises is a safety issue in so far as it relates to housing, I will be happy to pursue it.

The Deputy Presiding Officer:

The final question comes from Anas Sarwar.

Photo of Anas Sarwar Anas Sarwar Labour

I thank the economy secretary for the answers that she has provided so far.

I want to raise an issue to do with supply chains. It is clearly important that we ensure continuity of business, but it is also important that we maintain strong supply chains across the United Kingdom. If we do not have continuity of supply chains, we will not be able to get food and supplies to communities across the country, which will risk people going hungry. What communications are being had at a UK level to make sure that we maintain the logistics of supply chains to ensure that all communities across the whole of the UK, including rural and remote communities, are covered?

Photo of Fergus Ewing Fergus Ewing Scottish National Party

Mr Sarwar has raised another important point, and I am glad that he has done so. The supply chain is crucial to keeping society running, to keep shops supplied, and to keep hospitals, prisons and all public sector agencies supplied with food and provisions and what they require to continue to operate.

I will make two points. First, the issue is partly to do with maintenance of haulage and the ability of drivers to carry on. I know that the UK Government is taking that issue very seriously, because I have participated in conference calls with George Eustice in which supermarkets, for example, have asked for appropriate dispensations to be given in relation to the very necessary working time directive provisions that ordinarily apply, but which need to be made more flexible in times of crisis, and those dispensations have been given.

Secondly, on Monday, I had a lengthy discussion with wholesalers in Scotland and their trade representatives. We discussed many of these issues and what they require in order to continue to operate. They are affected by staff having to self-isolate, which is a practicality that just about every business in the country faces at the moment and which is likely to become far more serious over the short term. I assure Mr Sarwar that we are dealing with the matter on a continuous basis. If he has additional suggestions about what we might do, I would, of course, be happy to discuss them with him.