£430M cost of Nicola’s lockdown
... that’s what hospitality sector will lose thanks to SNP’s two-week delay in letting f irms reopen
SCOTLAND’s shops, pubs, hotels and restaurants face losses of more than £430 million over a fortnight because of the slow exit from lockdown.
Business leaders have warned that the delay to reopening is dealing a further blow to the country’s already battered economy.
First Minister Nicola Sturgeon has insisted her cautious approach has been necessary to protect public health – but the Scottish Retail Consortium (SRC) argues that it published plans on opening safely a month ago.
Now it estimates the damage to high street chains and local stores − which can reopen tomorrow, two weeks behind those south of the Border − is around £280 million.
Meanwhile, with English pubs, hotels and restaurants due to open
‘The SNP must act now to prevent further damage’
on Saturday, pubs in Scotland face losing a further £52 million of potential revenue before they can do the same on July 15, even with their beer gardens being allowed to open from July 6.
The Scottish Beer and Pub Association (SBPA) and UK Hospitality both estimate that Scottish hotels will also miss out on £70 million and restaurants up to £33 million.
With many businesses fighting for survival, industry leaders say that the delay has been ‘frustrating’.
SRC director David Lonsdale said: ‘Non-essential retailers have based reopening plans on the basis that a phased approach would be taken.
‘Given the official government guidance for retailers on trading safely was published over a month ago, there is a degree of frustration that it has taken until now to be on the cusp of reopening stores.
‘However, the industry has been working hard to ready itself and looks forward to helping get the economy moving again.’
Emma McClarkin, chief executive officer of the SPBA, said: ‘On average, every day a pub is closed it costs £984.86 in lost revenue – meaning that the extra 11 days that Scotland’s pubs will be closed could cost the sector as much as £52 million.
‘The opening of beer gardens on July 6 will decrease this somewhat, but the vast majority of premises don’t have outdoor space or it is simply financially unviable to operate on that alone. It certainly in no way makes up for a full reopening, which is happening on July 15 and July 4 in England.’
The combined cost of £435 million to only four sectors of the Scottish economy has raised further questions about the Scottish Government’s approach to easing lockdown restrictions.
It follows Finance Secretary Kate Forbes admitting that she could hit hard-pressed families with new local taxes, such as congestion charges, to help bail out councils.
Last night, Scottish Tory economy spokesman Maurice Golden said: ‘Scotland’s businesses must be allowed to open at the earliest possible moment. Every day counts. If the advice on school reopening has changed so dramatically because Scotland’s rate of infection is much better than anticipated, why hasn’t there been more flexibility in business opening dates?
‘The scale and urgency of the economic crisis Scotland faces is overwhelming. The SNP must act now to prevent further damage.’
The cost estimates do not take into account the impact of two-metre social distancing, which has been eased south of the Border but remains a requirement in Scotland.
This will limit the number of people who can enter shops, pubs, restaurants or hotels at any one time, further hitting takings.
During the pandemic, one in three Scottish jobs has relied on support from the UK Treasury.
Now businesses face crucial weeks, as they try to reopen and wean themselves off state support.
Former Nationalist MSP Andrew Wilson, a close ally of Ms Sturgeon, has warned that the Scottish economy could be the worst hit in the developed world. And Benny Higgins, chairman of the Scottish Government’s Advisory Group on Economic Recovery, has warned the country faces ‘carnage’ – with a potential 13 per cent increase in unemployment.
A Scottish Government spokesman said: ‘We know the scale of the challenge facing Scotland as a result of the coronavirus pandemic and understand many people will be feeling a deep sense of anxiety about their livelihoods. Keeping
people in work while supporting those who have lost their jobs will continue to be at the heart of our thinking as we carefully reopen the economy.
‘However, it is absolutely essential that protecting public health is a priority. It is only by properly suppressing the virus that we will achieve a resilient and sustainable economic recovery that does not place further costs on our economy and businesses.
‘The pandemic is having an extremely serious impact on the economy right across the UK, and the
Scottish Government has worked tirelessly to keep businesses afloat and ensure as many people as possible keep their jobs with a package of more than £2.3 billion in business support.
‘We have already moved swiftly and provided a £230 million shovel-ready infrastructure and growth package from existing resources.
‘However, a major economic and fiscal stimulus is required from the powers and levers which are held by the UK Government.’