Tourism Sector on The Brink Without Tailored Treasury Support

Scotland’s vital tourism sector is on the brink unless the Treasury urgently takes steps to strengthen support and bring forward a tailored financial relief package.

In a letter to Chancellor Rishi Sunak, Drew Hendry MP (pictured) ramped up calls for sectoral support – similar to steps taken by EU countries – that would stimulate growth, safeguard thousands of jobs and secure the industry’s long-term future as the impact of the coronavirus pandemic is felt, including –

Converting loan schemes to grants to prevent firms taking on unmanageable debt and being pushed further into hardship,

Extending the Job Retention Scheme & Self-Employment Income Support Scheme, and clarifying access to schemes for the devolved nations for as long as is required,

And, ending VAT for the tourism sector.

The tourism sector 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, Scotland welcomed 15.5 million visitors, with three and a half million people coming from overseas.

Commenting, the SNP’s Shadow BEIS spokesperson Drew Hendry MP said:

“The coronavirus pandemic has had a devastating impact on the economy, businesses and jobs.

“The tourism sector, which was gearing up for its peak season, has been hit especially hard.

“The support schemes and business rates holidays brought forward by the UK government have been welcome in the short-term, but time is fast running out for the future of the sector as the Treasury seeks to wind down its schemes.

“It’s critical that the Treasury heeds the calls to strengthen support and brings forward a financial relief package to help the industry weather this devastating storm.

“It must seriously look to convert loan schemes to grants – as firms face taking on unmanageable debt – and it must extend the Job Retention Scheme and the Self-Employment Income Support Scheme for as long as is required.

“The UK is one of the few European countries to charge full VAT on hospitality services.

“Countries such as Ireland and Germany have provided a tax subsidy boosting jobs and visitor numbers, and I urge the Chancellor to finally provide this much-needed relief in the UK.

“We are not alone in facing these challenges, however, other countries are already leading the way by injecting investment into their tourism industries.

“The UK government must put in place an urgent sector-specific financial package, similar to the €18 billion package the French Government has put in place to support its tourism sector.

“These are uncharted waters, however, we believe the right financial support and the ingenuity of the sector will allow us to save the tourism sector, protect thousands of jobs and ensure a strong economic recovery.”