Business leaders say Edinburgh's hospitality sector needs more financial support from government

Fears over widespread redundancies
Virginie Brouard says without any income she cannot contribute to furlough costsVirginie Brouard says without any income she cannot contribute to furlough costs
Virginie Brouard says without any income she cannot contribute to furlough costs

PRESSURE is growing for more government support for Edinburgh’s hospitality sector amid concerns about how restaurants, bars and hotels will survive the coronavirus crisis.

Hospitality businesses are seen as likely to be among the last to reopen, but with Scotland easing out of lockdown more slowly than England and the furlough scheme due to change from the end of July, there are fears of widespread redundancies.

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And even when hospitality businesses are allowed to reopen, social distancing might mean it is not economically viable for them to do so.

Now business leaders are calling for the furlough scheme to be extended and the rules on who qualifies for grants changed to help city-centre restaurants survive.

Chancellor Rishi Sunak announced last week the UK Government’s Jobs Retention Scheme scheme - which gives workers 80 per cent of their wages if they are kept on the payroll while not working - would be extended until October, but from August employers will be have to make a contribution.

Details have yet to be announced. But Virginie Brouard, owner of both Le Di-Vin wine bar and La P’tite Folie restaurant at Edinburgh’s West End, said she would not be able to contribute anything.

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“I have no income. Where am I supposed to find the money?” she asked.

“If we have to pay for staff while we are still not open and don’t have any income we will have to make everyone redundant.”

And she said if, when the lockdown was lifted for restaurants, she had to reopen at just 30 per cent capacity, she would have to decide whether it was worth opening or not.

Liz McAreavey, chief executive of Edinburgh Chamber of Commerce, said: “Tourism and hospitality businesses have been badly hit by the lockdown and with social distancing likely to be the norm for some time to come it’s hard to see how they can fully re-open on commercially viable terms whilst following government guidelines.

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“The main thing though is to protect staff as well as customers and businesses need to make this a priority when planning to re-open.

“The Chancellor has already extended the furlough scheme as it is, until end of July and will continue it, in some form, until October.

“The detail of this is yet to be announced but we as a Chamber network are lobbying that businesses who may be the last to re-open continue to be supported so that they can avoid permanent closure and job losses.

“How the economy recovers and how quickly we bounce back depends on businesses being able to survive and support employment and consumption.”

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Edinburgh Chamber of Commerce and its counterparts in Glasgow and Aberdeen wrote to the Scottish Governments earlier this month arguing for a review of the threshold which means businesses with a rateable value over £51,000 do not qualify for the Retail, Hospitality and Leisure Grant of £25,000.

They pointed out the limit meant many city centre businesses missed out on much-needed support just because their location pushed them beyond the threshold.

Failing to act on the problem, they warned, risked accelerating the decline of city centres.

Marc Crothall, chief executive of the Scottish Tourism Alliance, also called for more financial help from the government for the sector.

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He said: “The support that has been made available to the industry, especially the furlough scheme, has been very welcome.

“And the early bit of grant support to the smaller businesses has managed to keep a few alive and paying their bills in the short term.

“But 2,500 Scottish tourism businesses - hotels, pubs, restaurants and attractions - have basically not qualified for any grant support from the outset.”

He said hospitality and tourism were likely to be among the last businesses to reopen.

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“There is no way any of the tourism sector and the supply chain that feeds it can continue without longer term support right the way through the summer, the autumn and the winter into next year.”

Trying to reopen in a viable way while allowing for social distancing would be “really challenging”, he said.

“The furlough scheme was to protect jobs for the future and we have to protect businesses to be there as well. If there is no business there is no job.

“That’s why it’s essential the UK Government, the Scottish Government push hard and find any other support that can be made available to the industry now.”

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At virtual Scottish Questions in the House of Commons yesterday, the SNP’s Mhairi Black called for the furlough scheme to continue for as long as Scotland and the other devolved nations required it.

Scottish Secretary Alister Jack said it was a matter for the Chancellor, but added the scheme was already being extended to October 31. “I would hope we can all get people back to work over that period and get the economy up and running to save people’s livelihoods.”

Ms Black said afterwards: “The Tory government must come clean on whether it is intending to prematurely cut off access to the furlough scheme for thousands of people and businesses across Scotland.

“It is vital that people have the support they need for as long as the lockdown continues in each of the four UK nations. It would be completely unacceptable for the Tories to push households further into hardship by cutting off support during this public health emergency.”

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Top chefs Nick Nairn, Martin Wishart and Tom Kitchin yesterday warned Scotland’s hospitality industry was at risk of a “tidal wave of business closures and mass redundancies” and called for financial support to be extended into next year to help businesses get back on their feet.

They argued for the furlough scheme to be extended beyond its current end date in October, with “further flexibility and phasing” to support businesses until at least the first quarter of next year.

Garry Clark, of the Federation of Small Businesses, said it was “right and proper” that support for hospitality should be extended.

“We don’t know exactly what the process of unlocking the lockdown is going to look like, but it seems likely hospitality businesses will be affected for some time. Social distancing is obviously going to have a major impact. And businesses in Edinburgh are saying even if things begin to reopen in some way by August, without the Festival - which is the mainstay for a lot of businesses for the entire year - things are going to be really difficult.”