A Scottish Government minister has been warned there is a “problem” with the pandemic support system for businesses in Tayside and Fife.
Concerns were raised about the structure of the grant scheme amid claims it unfairly penalises companies that have no choice but to close, but are not legally required to shut.
External Affairs Secretary Michael Russell was urged to review the system, as local MSPs also highlighted the “tough” transition ahead for firms in Dundee, if restriction levels are heightened in the coming days.
Under a new grant scheme, businesses required by law to close are eligible for additional grants of £2,000 or £3,000 every four weeks, depending on rateable value.
However, firms that can remain open but cannot trade normally due to restrictions will only be in line for £1,400 or £2,100 every four weeks while the rules are in place.
Meanwhile, as part of Scottish Government plans, licensed premises in Level 2 of the five-tier system – which is expected to include Angus, Fife and Perth and Kinross – will be able to serve alcohol with a meal until 8pm, while in Level 3, potentially including Dundee, they can only remain open until 6pm, and cannot serve alcohol.
Willie Rennie, Scottish Liberal Democrat leader and North East Fife MSP, questioned the support system at a meeting of Holyrood’s Covid-19 committee on Wednesday.
“With the change of the opening hours, particularly for hospitality, many businesses will feel that they have no other choice but to close, but technically they will not be forced to close,” he said.
“Yet the grant support levels are either for those who are closing or hardship support for those who are affected by it.
If this is going to be the ongoing structure of the financial support, I think there is a problem.”
“That is obviously already in place in places like Fife and Tayside, that are in Level 2, and many of those businesses are closing, perhaps, even although they are not required to.
“They could probably survive for 16 days without maybe some support, although it would be tough.
“If this is going to be the ongoing structure of the financial support, I think there is a problem.
“I am just wondering if the government is going to change the structure of the support to recognise businesses that effectively have no choice but to close even though they are legally not required to?”
The government must change the structure of the support for businesses, to recognise those that have effectively got no choice but to close even though they're legally not required to. https://t.co/XaP3tiWT8d
— Willie Rennie (@willie_rennie) October 28, 2020
Mr Russell highlighted that funding for such grants in Scotland is dependent on decisions taken for firms in England.
“I think I have to say to Willie, were we entirely free to operate in the way we would like to operate, with the resource that we need to operate, I would 100% agree with him,” he said.
“Because I am a constituency MSP, as he is a constituency MSP, and he is receiving, I am sure, as I am receiving, very, very strong representation, from people whose businesses are on the line. Good businesses which they have operated well and believe they can continue to operate.
“But we are not in that position, so therefore what Fiona Hyslop and Kate Forbes have to do is try to find as much as they can to create the circumstances where there is support for everyone who needs it.”
Dundee City East SNP MSP Shona Robison expressed concerns about the impact businesses in Dundee may face if they have to prepare to move to Level 3 restrictions on Monday.
“Further to Willie Rennie’s point about business preparedness, what thought has been given to trying to maximise the time here that businesses can prepare?” she asked.
“Because with the best will in the world, businesses in Dundee will have to make changes effectively over a weekend, to start on Monday.
“That’s a tough call, and as you can imagine I’ve had a fair amount of representation.
“Going forward, what can government do to try to help businesses in that situation, where there may be rapid changes, to try to make sure they get the maximum support in a short period of time?”
Mr Russell said generally everyone should “hope for the best but prepare for the worst”, and outlined a new scrutiny system that would involve initial statements being made on a Tuesday each week, before a final sign-off is given for restrictions on the Friday.
Will boundaries cause tiers?
Meanwhile, Ms Robison also highlighted potential complications in areas close to the boundary between two local authority areas, if they are in different tiers.
“Clearly in areas like Dundee, they sit very closely to other local authority areas, which may be in different tiers,” she said.
“Take the Dundee-Angus border, you will have people living literally across the road from each other but in different tiers. And there are travel-to-work issues that have to be looked at.
“Is the government looking at those issues in regard to the new levels system, where you have areas in different tiers but absolutely interacting, particularly with people travelling to work?”
Mr Russell said: “Of course we are, and have to and will continue to look at those issues, so that everybody is not only doing the right thing, but know that the right thinking is taking place, and that the right consideration is taking place of what should happen.”