16 Dec 2020
By Stuart Patrick, Chief Executive of Glasgow Chamber of Commerce
If the Scottish Government wants to understand why its relationship with business is less warm than it would like, it should take heed of Marco Gianassi, owner of Glasgow Southside restaurant, Battlefield Rest.
“We are penguins in the zoo’ he said in an interview with the Herald following the First Minister’s announcement last week of the outcome of the latest review of Scotland’s tiering system.
The lifting of Level 4 restrictions in Scotland on Friday past will have been welcomed by many shops and hairdressers but the constraints of Level 3 leave thousands of businesses in hospitality in an impossible position, unable to trade profitably under the limited hours allowed and yet unable to cover their costs if they choose to close.
Mr Gianassi captured the mood perfectly. Business owners take enormous personal risks to set up and run their own firms, creating the jobs that society requires. They need to be in control of their own destinies, but in the current conditions find themselves in precisely the opposite place.
They have been left hanging on the words of politicians to discover if they can open their businesses or be left struggling, forced to apply repeatedly for grants they know won’t be enough to stop them falling deeper and deeper into debt.
The announcement of a further £185m of financial support demonstrated the wide range of companies affected from hospitality, tourism and taxi drivers through to the wedding industry, events and live music, cultural venues and food and drink suppliers.
The most Mr Gianassi’s business is likely to receive is £3,000. Every little helps but I couldn’t help noticing the German government declared that businesses closed by its Christmas hard lockdown would receive up to 500,000 euros each month. Compared to the assistance coming from either the UK or Scottish government this suggests a more ambitious intent to support their wealth creators through the Covid crisis.
The patience of so many small business owners is severely stretched, and they know that worse may be yet to come. The First Minister’s comment that it would be unwise for Scots to book their summer holidays next year elicited a fiercely negative reaction from the travel industry.
Here is the dilemma the politicians now face in securing business support for the next phase of the crisis. The physical arrival of the vaccine offers welcome hope and arguably gives some justification for choosing harder lockdowns now to get us through safely to the end. But the pressure on government to distribute the vaccine as fast as is bureaucratically feasible will also grow.
The First Minister may simply have been attempting to manage expectations but by suggesting that Scots may be over-optimistic in planning for the summer holiday season she has signalled that some form of constraint is likely for at least six months. Under the current system of financial support that is guaranteeing business failures and job losses.
There will come a point next year when the balance of action will have to shift from government intervention with formal restraints to personal decision based on guidelines about the risks involved.
If by the summer the vaccine has been widely distributed then the travel industry will have some justification for asking why holiday travel needs to be restricted. If the vaccine has not been widely distributed the industry might well be asking why not.
In either case both the UK and Scottish governments would be advised to set out their economic recovery plans for the next six months and help businesses plan ahead instead of them constantly waiting like penguins for the next feeding time.
This article was first published in the Herald Scotland on 16 December 2020.
