RISHI Sunak has been accused of leaving “Scottish businesses and workers short-changed” after the Treasury seemingly backtracked on promises of additional money for the devolved administrations.
This morning the Chancellor unveiled a new rescue package for retail, hospitality and leisure businesses forced to close under the new restriction.
Firms forced to close down under the new restrictions will be able to apply for one-off grants of up to £9000.
An initial notice from the Treasury said ministers in Edinburgh would also receive an additional £375 million “on top of the increased funding which has already been guaranteed by the UK Government” to help firms not covered by the new package.
Tory MSPs and MPs took to social media to hail the announcement.
“Very welcome news for Scotland,” Douglas Ross tweeted. “An extra £375m to support businesses affected by lockdown measures. The SNP must get this extra funding out the door immediately – for many businesses their survival depends on it.”
“The UK Gov has again reacted quickly to protect jobs,” Maurice Golden tweeted.
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“Scotland will receive £375m. I hope the SNP guarantees every penny will be spent immediately to help businesses cope with the new lockdown,” he added.
However, just minutes after that initial announcement, details on the Treasury’s website changed.
Instead of being new money, the Scottish Government was now receiving the £375m contribution as part of the “funding which has already been guaranteed.”
Scottish Finance Secretary Kate Forbes said she was both “surprised and disappointed” by the announcement.
She said: “We are both surprised and disappointed that the UK Government’s announcement of additional funding for businesses in England will not – despite the initial indications – generate further new funding for the Scottish Government or other devolved administrations.
“This is a blow to Scottish businesses, whose expectations had been raised by the announcement, and I will be writing to the Chancellor to raise the issue.
“We fully understand that while the tight new restrictions now in force are necessary to slow spread of the virus, they represent another blow for businesses.
“That is why we have allocated £570m since October to helping businesses, and this sum will rise due to the number of new businesses eligible for support under the latest lockdown restrictions.
“Our priority is to ensure that assistance reaches those most in need as quickly as possible. In recent weeks we have announced an extra £185m of sectoral support, including one-off grants for hospitality businesses, an additional £41m top-up support for non-essential retail and gyms and a £30m local authority discretionary fund.”
Scottish Labour finance spokesperson Jackie Baillie said: “It only took the Tory Government a matter of minutes to renege on its commitment of additional funding for Scotland on top of the UK-wide support scheme announced today.
“This is an embarrassing U-turn that leaves Scottish businesses and workers short-changed.
“It’s time for the UK Government to honour its original statement and provide the additional funds for devolved nations and regions on top of the UK-wide funding package.”
Tory Scottish Secretary Alister Jack conceded the funding was not new, but urged the Scottish Government to use the £8.6 billion made available from Westminster to support businesses north of the Border.
He said: “As throughout this crisis, the UK Government’s priority remains to keep people safe and support jobs in all parts of the UK.
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“The Chancellor has set out additional support for businesses in England. We hope the Scottish Government uses some of the £8.6 billion we have provided to support struggling Scottish businesses similarly.
“This is on top of the direct UK Government support for people and businesses in Scotland – including our furlough scheme now extended to the end of April, self-employed support, business loans and procuring and paying for millions of doses of the Pfizer and Oxford vaccines.
“The strength of the Union and support offered by the UK Treasury has never been more important.”
Under the new package, firms will be able to claim up to £9000 depending on their size. The smallest sites will be able to claim up to £4000 and medium-sized ones £6000. Payments will be tied into the business rates typically paid by each business.
Sunak said: “Throughout the pandemic we’ve taken swift action to protect lives and livelihoods, and today we’re announcing a further cash injection to support businesses and jobs until the spring.
“This will help businesses to get through the months ahead – and crucially it will help sustain jobs, so workers can be ready to return when they are able to re-open.”
Sunak did not rule out further support in future, in particular over business rates relief and sick pay improvements.
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