Chancellor Rishi Sunak’s measures announced today “fall some way short” of what is urgently needed to rescue Scotland’s tourist industry, according to a trade body.
The Scottish Tourism Alliance said that many tourism businesses would miss out to change the Jobs Support Scheme.
STA chief executive Marc Crothall said: “The Jobs Support Scheme will only help businesses which have sufficient demand to pay these minimum hours; the majority of tourism businesses simply will not be able to do so as their businesses are either closed due to legislation or restrictions.
“This continues to create pressure on the payroll at a time when consumer confidence and demand for the services which the tourism sector offers is at an all-time low, coupled with the increased restrictions in place.
“There is not enough work for people in our sector and employers cannot afford to pay staff when there is no work so we can still expect to see mass redundancies.”
He said the impact of extending the current 5% VAT until March 2021 would only have “marginal” effect on the Scottish tourism industry “given that so many businesses will now be forced to make redundancies and close their doors for good.”
He added: “News of the loan repayment extension, Pay as you Grow, and the extended opportunity for businesses to continue to apply for loans as a last resort, with the knowledge of there being less pressure on repayment timelines will be welcomed by many but sadly, it just won’t go far enough to protect and save our industry from significant decline.
“I know so many businesses within the tourism industry and supply chain were hopeful that today’s announcement would offer an immediate life-line, especially those businesses who have not been able to restart or have been significantly impacted by the loss of the international market.
“The reality we must all face now is that within the coming days and weeks, businesses owners will lose their livelihoods, thousands will lose their income and the effects on the economy and people’s lives will be nothing short of devastating.”
But there was a warmer welcome from some other business bodies.
CBI Scotland director Tracy Black said: “These bold steps from the Treasury will save hundreds of thousands of viable jobs this winter.
“It is right to target help on jobs with a future, but can only be part-time while demand remains flat. This is how skills and jobs can be preserved to enable a fast recovery.
“Wage support, tax deferrals and help for the self-employed will reduce the scarring effect of unnecessary job losses as the UK tackles the virus. Further business rates relief should remain on the table.
“Employers will apply the same spirit of creativity, seizing every opportunity to retrain and upskill their workers.
“The Chancellor has listened to evidence from business and unions, acting decisively. It is this spirit of agility and collaboration that will help make 2021 a year of growth and renewal.”
While an employment law specialist said it would leave employers weighing very carefully whether it was enough to save jobs for their business.
Daniel Gorry, deputy head of employment law at Law At Work said: “The latest measures laid out by the Chancellor will come as a welcome relief for many businesses which may have been forced to make a significant proportion of their workforce redundant.
“Whilst Sunak was careful to stress that this scheme is not a silver bullet to save all businesses, it certainly gives companies an additional avenue to pursue, and exhaust, before making necessary cuts.
“Employers in the midst of redundancy processes will now need to consider whether the new scheme gives sufficient support to allow compulsory redundancies to be avoided. “As was the case with the furlough scheme, it is possible that failure to make use of government support could be a factor for tribunals to consider when determining whether a dismissal is legally fair.
“As a result, employers should be careful to clearly communicate their rationale for continuing with redundancies if they choose not to utilise the new scheme.”
“Employers who do choose to make use of this new form of support should also give careful consideration to how it is implemented. We do not yet have detailed information about how the scheme will be administered but it is likely that, as with the furlough scheme, employers will need to seek agreement from staff to implement what is essentially a temporary change to terms and conditions. In addition, employers should always aim to avoid any implicit discrimination when deciding what measures to put in place in respect of a group of staff.”