Wednesday 15 April 2020 2:45 pm

Scottish government does U-turn on coronavirus business grant scheme

The Scottish government has changed its coronavirus business grant scheme to make it more generous for hospitality, retail and tourism chains after mounting criticism from the private sector.

SNP finance minister Kate Forbes unveiled £220m of new grants today in a bid to close the gap between relief available for Scottish and English businesses.

Read more: ‘Unfair’ Covid-19 business grant scheme means more Scottish firms could go under

English hospitality, tourism and leisure chains have been offered government grants of up to £25,000 per venue, as long as the building’s rateable value is less than £51,000. This means a pub chain with four venues could receive £100,000 through the scheme.

However, Forbes and Scottish first minister Nicola Stugeon decided to give out grants per business and not per property, meaning the same chain in Scotland with four venues would have only received £25,000.

Forbes did a u-turn today and businesses will now receive grants on a per venue basis, but each additional property will only receive 75 per cent of what their English counterparts would get.

Today’s announcement was welcomed by many, however some were quick to point out that it still did not put Scottish and English businesses on an equal footing.

Tory MSP Jamie Halcro Johnston told the Press and Journal: “While this still doesn’t provide the same levels of support as is available to businesses south of the border, the Scottish Government’s belated u-turn is welcome nonetheless.”

The u-turn comes after outraged hospitality and retail chain owners went public with claims that the policy would have put many companies out of business.

Kevin Doyle, director of pub and restaurant chain Caledonian Heritable, told City A.M. yesterday that “any company that is multi-operational in Scotland has been disenfranchised and will really struggle”.

Chancellor Rishi Sunak originally handed the Scottish government £2.2bn for the business grants package.

Scottish economy minister Fiona Hyslop was quick to say Scotland would be “replicating [England’s] package of measures in full”, however this was soon overruled.

Forbes, who was only appointed Scottish finance minister two months ago, made the decision to also distribute the £2.2bn pot from Sunak to businesses in industries other than hospitality, tourism and retail.

Read more: Lending through UK coronavirus scheme hits £1.1bn after three weeks

Announcing the the new package of measures today, Forbes said: “Around 100,000 businesses in total are already eligible for our small business grants and from today we will be extending that scheme in response to feedback from businesses on the frontline of this economic crisis. 

“The creation of a £100 million fund is to help those micro and SME businesses who face immediate cash flow challenges, are ineligible for other schemes and are the productive base for supporting employment in the future.”

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