Coronavirus: Tourism sector ‘will require long-term help’

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Media captionScotland Office Minister Iain Stewart and Scottish Tourism Secretary Fergus Ewing

Scotland’s tourism sector will need “long-term help” to recover from the economic impact of Covid-19.

Tourism Secretary Fergus Ewing said this included extending the furlough scheme beyond October.

He also urged the UK government to cut VAT to 5% as the sector prepares to reopen on 15 July.

But Scotland Office minister Iain Stewart said the Scottish government should be “more ambitious” on reviving the economy by autumn.

Last month Chancellor Rishi Sunak extended the UK scheme – which pays the wages of workers on leave because of coronavirus – to October.

Mr Sunak confirmed that employees would continue to receive 80% of their monthly wages up to £2,500 but the government would ask companies to “start sharing” the cost of the scheme from August.

But Mr Ewing has called for additional support to get businesses through the off-season.

Speaking on the BBC’s Politics Scotland programme, Mr Ewing said: “We do think that the assistance which will expire in October will be insufficient to achieve the primary objective here which is to mitigate financial hardship for businesses who, at the moment, have no revenue but fixed overheads which continue to be paid.

“Our assessment of the impacts on tourism, even after resumption, which we hope will be the 15th of July in Scotland, will be so severe that long-term help will be required.”

Mr Ewing said in countries such as France, Italy and Spain “enormous packages” of financial support had been made available.

“We do believe that the UK will need to look again, and very seriously, at the nature and extent of support which could include a cut of VAT rate to 5%, which I believe is an approach that other countries in the EU are taking,” he said.

‘Pretty draconian’

Mr Ewing said he had had “constructive dialogue” with the UK tourism minister, Nigel Huddleston, and remained “hopeful” additional support could be agreed.

He told the programme this was especially critical as the tourism season typically ran from April to September and businesses would need help during the quieter winter months.

The minister added: “To cut off support for when the season ends, from out point of view, looks pretty draconian.”

The tourism secretary said he remained optimistic businesses would be able to reopen on 15 July, unless there was a second wave of infections or a localised spread.

New guidance was published last week for businesses and customers ahead of trading resuming for the first time in almost four months.

On the same programme, Scotland Office Minister Iain Stewart was asked if the Treasury was prepared to extend the job retention scheme past its October cut-off.

He did not directly answer the question about Treasury discussions, but replied: “I think the focus of the Scottish government should be a bit more ambitious to make sure the economy is getting up and running by the autumn.”

Mr Stewart also said it was “not helpful to focus on that specific scheme beyond October”.

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