Bed and Breakfasts and Guest Houses (Support)

– in the Scottish Parliament on 12th November 2020.

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Photo of Daniel Johnson Daniel Johnson Labour

4. To ask the Scottish Government how it will ensure that all bed and breakfasts and guest houses will be eligible for financial support in response to the Covid-19 pandemic. (S5O-04748)

Photo of Fergus Ewing Fergus Ewing Scottish National Party

We have supported bed and breakfasts and guest houses as part of our package totalling more than £2.3 billion. That includes almost £900 million in non-domestic rates relief, £1.3 billion via business grants and a £145 million package for small and medium-sized enterprises and the self-employed. We have also made £3 million available to support bed and breakfasts with no business bank account. Support grants are aimed at businesses that are required to close by law or businesses that remain open but are directly impacted by restrictions. Scotland’s lack of borrowing powers prevents us from fully responding to the economic crisis, and limited funds mean that we must target resources.

However, we are continuing to assess what can be done with the additional consequentials that were recently announced, and we will of course consider support for businesses within the tourism industry as part of that.

Photo of Daniel Johnson Daniel Johnson Labour

In a previous answer, the cabinet secretary referred to businesses that fell through the gaps of previous financial support packages. Bed and breakfasts were one such group, and I was contacted by multiple B and B owners who failed to get financial support because they lacked a business bank account. Can the cabinet secretary give a cast-iron guarantee now that, if further restrictions are put in place that prevent those businesses from operating, they will receive that financial support and will not fall through the gaps once again?

Photo of Fergus Ewing Fergus Ewing Scottish National Party

I think that I covered that in part in my original answer, but I reiterate that we are absolutely committed to providing assistance to businesses that require lifeline support. I have already said that accommodation providers, including B and Bs and guest houses, have had a difficult time—there is no doubt about that—and we wish them to survive the crisis.

By analysing the Barnett consequential funds that we have received and how they can best be deployed, we want to meet gaps, provide for needs and provide lifeline support across the sector. That is the work in which we are engaged as a matter of urgency, especially with regard to Parliament’s express wishes yesterday evening. I assure members that we are taking this matter extremely seriously, and I will be having a meeting on the topic with officials later this afternoon.

The Deputy Presiding Officer:

Three members have not yet had supplementary questions, and I would like to take them all, starting with Colin Smyth. I ask them to be brief.

Photo of Colin Smyth Colin Smyth Labour

Thank you, Presiding Officer. The Government published its Covid framework, which stated that hospitality businesses at levels 2 and 3 could open, albeit with different levels of restriction. Days later, however, it imposed regulations closing all non-food-serving pubs and pubs that serve food but do not prepare it on site. Given that we now know that those businesses can access the furlough scheme, whether they are closed or open, can the cabinet secretary tell us why the Government is still refusing to allow non-food-serving pubs to open, utterly contradicting its own framework?

Photo of Fergus Ewing Fergus Ewing Scottish National Party

We need to strike a difficult balance between public health and lives and livelihoods. It is sadly the case that the expert health evidence that we have and that is contained in advice given to other Administrations in these islands and given to Governments all across Europe is the same: that people—[

Interruption

.]

Mr Smyth likes to mutter from a sedentary position, like Mr Mundell, but I will carry on with the answer. We have to take decisions to protect public health, and according to the expert medical advice that we have, there is a proven increased risk of Covid infection where people gather together for longer than a certain time. We have to take that seriously.

Of course, none of us want any restrictions to continue for a moment longer than they have to, so these things are always kept under careful review.

Photo of Liam McArthur Liam McArthur Liberal Democrat

I echo Daniel Johnson’s comments about the difficulties for self-catering and bed-and-breakfast businesses that did not have a business bank account and were initially excluded from earlier schemes. Can the cabinet secretary therefore offer a guarantee to me and Mr Johnson that such a mistake will not be made in any future programmes and that businesses will not struggle to get access to the funds that they desperately need?

Photo of Fergus Ewing Fergus Ewing Scottish National Party

I sympathise with the point that Mr McArthur makes, so I will repeat what I said in my original answer. We made £3 million available to support bed and breakfasts that had no business bank account. We have encountered the problem before and we dealt with it. I very much hope, therefore, that that has happened. It follows that if a business has suffered in a particular way, provided that it can establish that it is operating as a business as opposed to a non-commercial business, the fact that it does not have a bank account should not prevent it from qualifying for compensation. That was the rationale that was used last time. We wanted to distinguish between, for example, Airbnb properties, where someone is using their property to make a bit of money for a few days a year or something like that, and a bona fide business.

We must be careful with public money. We must make sure that we do not use that money in such a way that it allows fraudulent applications. That has been the subject of some publicity, particularly with regard to other schemes administered by the UK. It is a difficult balancing task, but I want to impress on Mr McArthur and his constituents that I am looking very sympathetically at this. I do not think that not having a business bank account should prevent one from obtaining compensation if one’s business has been severely impacted by the Covid virus.

Photo of Claire Baker Claire Baker Labour

The business restrictions grant is available only to a prescribed list of eligible businesses that does not reflect the impact of the restrictions on other businesses. Will the Scottish Government review the list of eligible businesses that can receive the restrictions grant? How can businesses be added to that list? Will the Scottish Government give flexibility to local authorities to decide which businesses that are important to their local economy are suffering from the impact of the current restrictions?

Photo of Fergus Ewing Fergus Ewing Scottish National Party

I think that I have indicated quite clearly—and, to be fair, to a number of different members— that we are looking at how best we can use the additional Barnett consequentials to meet real need and to help businesses to survive. That is the fundamental principle and if that means that we need to revisit previous decisions, that is something that we should do.

It is perhaps better that we apply an approach to similar businesses across Scotland in a uniform fashion. In other words, I would not want businesses to lose out just because of the particular area in which they happen to operate. On the other hand, we have worked very closely with local authorities, which delivered the grant finance earlier in the year effectively.

I will look sympathetically at Claire Baker’s request. It is part of the overall mix of the work that we are doing at the moment as a matter of urgency, and which I think I have now mentioned on more than one occasion.

The Deputy Presiding Officer:

Question 5 has been withdrawn and question 6 has not been lodged, so that concludes portfolio questions.