A Report from Scottish Parliament
The Committee held their first session since lockdown restrictions came into force and heard evidence from the Cabinet Secretary Fergus Ewing and his officials on the impact of COVID-19 on Scotland’s tourism sector and the measures the Scottish Government had put in place to support the sector through the crisis. This included a substantial level of discussion on the issues of planning the recovery of the tourism sector and self-caterer gaining access to business support grants.
The Convener, Joan McAlpine announced that due to Covid-19, the Committee had made changes to its work programme and that they would now prioritise work on the impact of Covid-19 on the culture and tourism sector. The Convener added that they would hear next week from the Cabinet Secretary for Economy, Fair Work and Culture Fiona Hyslop.
Opening Statement from the Scottish Government
The Cabinet Secretary for Rural Economy and Tourism Fergus Ewing told MSPs that the current situation was “unprecedented in modern times” and that the overriding priority of the Scottish Government had been to preserve life. This objective had consequently required the curtailment of freedom of movement and the impact on tourism had been “devastating” with Scotland “essentially having no form of tourism at the current time.” Therefore, the Scottish and UK Government had provided support to the industry at “necessity and speed” to survive the crisis. The Cabinet Secretary ended by stating that public health had to be the priority and that any relaxation of the lockdown measures must be informed by medical expert opinion.
Sectoral Re-Opening and Recovery of Tourism
The Convener highlighted the work of Scottish Tourism Emergency Response Group (STERG), Visit Scotland and others in terms of planning beyond the immediate crisis. She noted the potential for staycations in Scotland but also raised the concerns that many rural areas might feel at the prospect given the current strong ‘do not travel’ messaging.
The Cabinet Secretary said that he was keen to see restrictions lifted once it was safe to do so and that the Scottish Government was using this time to prepare for the lifting of restrictions through its work with STERG, the Scottish Tourism Alliance and individual tourism organisations. As there would be concerns about an “influx” of tourists in rural areas, it was essential that they and stakeholders use this period to plan appropriately and ensure the relevant infrastructure was in place to ensure safety. The Cabinet Secretary commented that staycations would prove to be extremely popular given that “people have been cooked up in flats and will want to enjoy a holiday as soon as they can.”
Also touching on the recovery, Annabelle Ewing (Cowdenbeath) (SNP) asked whether the Scottish Government was assessing the situation in comparable countries in terms of their tourism market and if there was the potential to reduce the VAT rate on the tourism sector. The Cabinet Secretary said that Visit Scotland were undertaking work on international comparisons. He offered some additional comments on the need to focus on recovery, including offering reassurance to the public, carrying out preparatory planning, and effective messaging.
Claire Baker (Mid Scotland and Fife) (Lab) referred to recovery developments in Spain with the publication of good practice points for the sector. In terms of equivalent measures in Scotland, she wondered whether the onus would be on industry or the government to provide the necessary guidance procedures, or if the government would endorse industry work, and how this would be introduced and monitored. The Cabinet Secretary said that the Scottish Government had not taken a defined and prescriptive policy on this but that it was his view was that guidance should be jointly produced between government and industry, and that this would be informed by the government’s analysis of the public health considerations.
Business Support Grants
MSPs took the opportunity to raise numerous concerns with various support packages provided by the UK and Scottish Government and the gaps in support – this included a discussion around support for larger businesses with a rateable value over £51,000, the Pivotal Enterprise Resilience Fund, money for the self-employed, bespoke support for coach operators and the wholesale sector, as well as a 12-month support package for the tourism industry.
Claire Baker highlighted the findings of ASSC surveys on the difficulties of self-catering operators accessing support from local authorities. While there had been some movement, she mentioned the “postcode lottery” in terms of the funds and asked the Cabinet Secretary to look at the concerns over 140-day criteria and the guidance provided to councils. The Cabinet Secretary replied that the Scottish Government were working with local authorities and that he had spoken with Fiona Campbell of the ASSC and would continue to engage with her to see if there was anyway to amend the 140-day criteria. However, he also emphasised the rationale behind the Scottish Government’s position as they wished to avoid the situation in England where £550m had been paid out to owners of vacant second homes.
Bettina Sizeland followed-up on the issuing of grants, noting that the Scottish Government had published figures relating to the distribution of funds by local authorities and that she would supply this evidence to the Committee following the meeting. She added that there were “initial variations” in terms of the distribution of grants but local councils had since been working together to ensure greater consistency.
Oliver Mundell (Dumfriesshire) (Con) also underlined the concerns of the self-catering industry on business support grants, specifically on the 140-day criteria, and said he had numerous examples from his constituency of operators missing out on funding for this very issue. The Cabinet Secretary explained the basis behind the 140-day criteria to ensure that: (1) any money distributed went to “legitimate” businesses; and (2) it enabled the Scottish Government to give support to extend support to other businesses. However, the Scottish Government were looking at the flexibility on the criteria and whether they could be “more generous or not” but said that this would ultimately depend on the overall financial situation. He also offered to assess any local examples from Oliver Mundell’s constituency.
In terms of the general provision of grants, Kenneth Gibson (Cunningham North) (SNP) commented that the taxpayer should not be involved in “income substitution” replacing the full amount of money lost by businesses but instead supplying support to ensure their survival. The Cabinet Secretary concurred with this point, saying that the grants would help businesses meet overheads and help navigate themselves through the crisis.
Business Interruption Insurance
In response to a question by Stuart McMillan, the Cabinet Secretary expressed concern at the behaviour of insurance companies.