Letter to the Chancellor – Support for Tourism & Hospitality

 

 

 

 

By email to: Rt Hon Rishi Sunak MP,  Chancellor of the Exchequer

Dear Rishi,

SUPPORT FOR THE TOURISM AND HOSPITALITY SECTOR

We are writing to urge you to give the tourism industry across all nations of the UK, a much-needed lifeline.

Tourism is worth £10.5 billion to the Scottish economy with day and overnight visitor spending accounting for £7 billion of Scotland’s GDP. In 2018, we welcomed 15.5 million visitors, with three and a half million people coming from overseas. Before the pandemic, associated tourism businesses employed over 8% of our workforce.

Hospitality and tourism sectors form an organic network of interdependencies across our communities from micro-businesses to some of our biggest private employers.  These are sectors that matter to our economy, culture, and future prosperity.

Like you, we are acutely aware that there is not a sector unaffected by COVID 19, but we similarly hope you see that the road to recovery will be particularly slow and high risk for tourism and hospitality businesses.

These sectors don’t only rely on people travelling and visiting in numbers; they need people sitting in their restaurants and pubs, they need holidaymakers staying in hotels and their function rooms booked up with conferences and events. Right now, none of this activity is happening, nor should it be – but the stranglehold on these businesses is tightening.

As you know, the pandemic struck just as the tourism sector was gearing up for its money-making season. The grant schemes and business rates holidays have been welcome and have helped keep most businesses afloat in the short term, but time is running out.

Returning to business as usual now is simply not an option. To do so risks public health, our communities and our long term recovery. We are still in the midst of a public health crisis. While we are all acutely aware of the impact ongoing restrictions have on our economy; I am sure you agree that the route-map out of lockdown must be in line with scientific advice to control the spread of the virus.

In Scotland, we boast a tourism industry that is resilient, innovative and ingenious. These businesses already know how to survive harsh off-seasons, but they will not be able to recover from this economic crisis without significant financial backing.

It is likely to be 2021 before tourism businesses that do survive, generate meaningful earnings and up to 3 years before there is momentum to get back to where we were before the pandemic. Business owners face the prospect of what some call ‘three winter’ trading conditions.

They need a sectoral economic recovery plan backed by real financial incentives, and we are asking you to put in place the measures to achieve this.

 Convert Loan Scheme to Grants

The starting point would be re-evaluating the UK Government’s loan scheme (CIBLS). We know businesses have benefited from this scheme, but unfortunately, it isn’t working for the majority of tourism businesses or small to medium enterprises.

The businesses that have qualified for support now face trying to meet payments without any new sources of income. Piling on the debt just pushes the problems out and restricts, if not kills off the investment that will be required to kick start this sector.

We urge you to convert this financial backing to grant support, to allow the Scottish Government to provide additional grants for the tourism sector and other vital industries most at risk.

Extend Furlough Scheme & Self Employment Support

The furlough scheme has allowed employers to retain staff through lockdown and has kept money in employees pockets. While the scheme hasn’t helped all, it has been a welcome intervention for business owners and employees.

It is for this reason; we ask you to reconsider your plan for a blanket approach to scaling down the furlough scheme and to commit to extending the self-employment scheme further. We believe introducing further financial burdens on business owners at such a critical time will result in the loss of hundreds of thousands of jobs. Indeed, we have already seen mass redundancies across the hospitality sector in response to your announcement to ask for employer contributions.

The tourism sector is simply not in a position to recover yet, especially with the introduction of new quarantine restrictions.  We, therefore, ask that you consider reviewing the furlough scheme on a sectoral basis, extend and fully fund the furlough scheme for tourism and hospitality businesses and to continue to support self-employed people who are unable to resume tourism businesses.  Similar measures are also needed to support our aviation sector.

End VAT for Tourism Sector

As you will know, the UK is one of the few European countries to charge full VAT on hospitality services. Countries such as Ireland and Germany have long provided a tax subsidy boosting jobs and visitor numbers, and the same should happen here. We have called for VAT relief for the sector for a long time, and we urge you to provide this much-needed relief now. If we don’t stand with our tourism and hospitality businesses now, they won’t be here to play their vital role in regenerating our economy, and it is our local economies that will pay the ultimate price.

Incentivise and Innovate

To save our tourism sectors, we also need to look outward and see how other nations are responding to this crisis. On quarantine, we could look to places like Iceland, where visitors take a free Covid-19 test on arrival and, only those who test positive, are required to quarantine for 14 days. In Cyprus, the Government will pay the hotel, food and medical costs of any visitor who contracts the disease while visiting and both the Swiss and Japanese Governments are promoting ‘Staycations’ by paying a bonus to domestic visitors to support their tourism industry.

To ensure the future of the tourism and hospitality sectors, both the UK and Scottish Government need to put our tourism economy at the heart of recovery plans, and we urge you to work with the Scottish Government to this end.  We need a coordinated and robust response; a rapidly developed, transparent and flexible plan with buy-in across the sector.

As you know, we are not alone in facing these challenges. Other countries are already leading the way by injecting investment into their tourism industries. We, therefore, urge you to put in place an urgent sector-specific finance package, similar to the 18 billion euros package the French Government have put in place to support its tourism sector.

These are uncharted waters with shifting tides and currents; however, we believe with the right financial support and the ingenuity of the sector will allow us to save the tourism sector.

Please don’t hesitate to get in contact if you would like to discuss these matters in more detail – we must all work together to support our communities through COVID-19.

We look forward to hearing back from you.

With regards,

Drew Hendry MP

SNP Business, Energy & Industrial Strategy Spokesperson

Member of Parliament for Inverness, Nairn, Badenoch & Strathspey

Co-signed by:

Alison Thewliss MP, Glasgow Central

Ian Blackford MP, Ross, Skye and Lochaber

Kirsty Blackman, MP for Aberdeen North

Brendan O’Hara MP, Argyll & Bute

Gavin Newlands MP, Paisley & Renfrewshire North

John Nicolson MP, Ochil & South Perthshire

Kenny MacAskill MP, East Lothian

Owen Thompson MP, Midlothian

Pete Wishart MP, Perth & North Perthshire

Martyn Day MP, Linlithgow & East Falkirk

David Linden MP, Glasgow East

Margaret Ferrier MP, Rutherglen & Hamilton West

Tommy Sheppard MP, Edinburgh East

Hannah Bardell MP, Livingston

Anne McLaughlin MP, Glasgow North East

Stewart McDonald MP, Glasgow South

Amy Callaghan MP, East Dunbartonshire

Carol Monaghan MP, Glasgow North West

Alan Brown MP, Kilmarnock & Loudoun

Kirsten Oswald MP, East Renfrewshire

Neale Hanvey MP, Kirkcaldy & Cowdenbeath

Lisa Cameron MP, East Kilbride, Strathaven & Lesmahagow

Neil Gray MP, Airdrie & Shotts

Dave Doogan MP, Angus

Douglas Chapman MP, Dunfermline & West Fife

Richard Thomson MP, Gordon

Deidre Brock MP, Edinburgh North & Leith

Ronnie Cowan MP, Inverclyde

Stephen Flynn MP, Aberdeen South

Patrick Grady MP, Glasgow North

Patricia Gibson MP, North Ayrshire & Arran

Angus MacNeil MP, Na h-Eileanan an Iar

Alyn Smith MP, Stirling

Marion Fellows MP, Motherwell & Wishaw

Stuart McDonald MP, Cumbernauld, Kilsyth & Kirkintilloch East

Allan Dorans MP, Ayr, Carrick & Cumnock

Chris Law MP, MP for Dundee West

Phillipa Whitford MP, Central Ayrshire

Stewart Hosie MP, Dundee East

Steven Bonnar MP, Coatbridge, Chryston & Bellshill

Martin Docherty-Hughes MP, West Dunbartonshire

Chris Stephens MP, Glasgow South West

Peter Grant MP, Glenrothes