Hospitality trade in Scotland still faces uncertain future
Organisations representing major employers welcomed the extension of the coronavirus jobs retention scheme, but individual businesses in the worst affected sectors say they still face agonising decisions about laying off staff.
In Edinburgh’s hospitality sector, business owners say redundancies are inevitable as the support is likely to start being withdrawn before it is clear when they will be able to reopen.
Paul Brennan, co-owner of Dine restaurant above the Traverse, has 32 staff and expects he will have to lay off half of them.
He said phasing the withdrawal of support would not change the situation.
“I think regardless I’m looking at redundancies,” he said. “I don’t know how hospitality businesses, like restaurants, who in August will have been closed for five months, will be able to afford it. We all have running costs which we need to meet without any income. I don’t think there’s any way of getting away from the fact there will be redundancies.”
And Virginie Brouard, owner of both Le Di-vin wine bar and La P’tite Folie restaurant at the West End, also said she would have to make some of her 26 staff redundant. “It’s a good gesture to say at first you have to pay national insurance and pensions only, but even that would be £1,900 a month and I have no income.
“I want to keep my staff, but where am I going to find the money? I would have to use my own savings. We spoke to the staff and they completely understand I will not be able to pay 20 per cent. I have a good relationship with my staff but some of them will definitely be made redundant.”
The decision to extend the support scheme for the selfemployed has also been widely welcomed – but for those working in industries unlikely to restart any time soon, the future remains uncertain.
And for those who have set themselves up as limited companies, paying themselves in dividends rather than a salary, the government confirmed yesterday there would be no support, since a scheme to cover their losses would be too difficult to design fairly.
“A third of the creative workforce is freelance, including those working in music, performing arts, film, festivals and live events, who will be unable to return to work for quite some time,” said Caroline Norbury, the chief executive of the Creative Industries Federation.
Dr Liz Cameron, chief executive of the Scottish Chambers of Commerce, said the job retention scheme had been a “lifeline” and couldn’t continue indefinitely at huge cost.
“The big challenge for Scottish businesses is that the UK government’s new tapered approach to the furlough scheme is not aligned with the Scottish Government’s roadmap out of lockdown,” she said. “This will affect crucial areas of the economy such as tourism which are forced to close for longer.
“Before tapering hits, we need to ensure all sectors of our economy are able to generate trade so they are able to pay employees. Currently there is still a lack of clarity over when they can re-open.
“We urge the chancellor to adopt measures to ensure that businesses facing ruin as the furlough scheme tapers aren’t forced to fall at the last hurdle.”