UK Government’s post-lockdown economic rescue package meets with mixed reaction in Borders

UK chancellor of the exchequer Rishi Sunak’s post-coronavirus lockdown rescue package for the British economy has met with a mixed reaction among politicians in the Borders.

By Darin Hutson
Thursday, 9th July 2020, 1:47 pm
UK chancellor of the exchequer Rishi Sunak leaving 11 Downing Street in London yesterday to unveil a mini-budget to help kick-start the UK economy following the Covid-19 lockdown. (Photo by Tolga Akmen/AFP via Getty Images)
UK chancellor of the exchequer Rishi Sunak leaving 11 Downing Street in London yesterday to unveil a mini-budget to help kick-start the UK economy following the Covid-19 lockdown. (Photo by Tolga Akmen/AFP via Getty Images)

Fellow Conservatives John Lamont and Rachael Hamilton have welcomed his summer economic update yesterday, July 8, but Scottish National Party MSP Christine Grahame is less impressed.

Among the measures announced by Mr Sunak are a £1,000-per-head incentive for employers to bring back furloughed staff, six-month VAT cut of 15% for the hospitality industry, half-price vouchers for eating out next month and subsidised employment scheme for young people aged 16 to 24.

That bid to reboot an economy ravaged by almost four months of lockdown has been given the thumbs-up by Mr Lamont.

The Berwickshire, Roxburgh and Selkirk MP said: “The chancellor said at the start of this crisis that he will do everything he can to protect jobs. This plan will protect as many jobs as possible in the Borders.

“The new kickstart scheme will help young people across Great Britain gain vital training and work experience while ensuring they get a wage.

“Unfortunately, young people are usually the hardest hit during an economic crisis. This should go some way to avoiding that.

“The VAT cut will be especially welcome here in the Borders where large parts of the economy rely on tourism, with day-trippers and tourists visiting our restaurants and local attractions.”

Ettrick, Roxburgh and Berwickshire MSP Rachael Hamilton agrees, saying: “This is a historic intervention from the UK Government.

“The tourism and hospitality industry have been given a lifeline to protect jobs and livelihoods and save businesses.

“I am delighted that young people too can have confidence that more opportunities for work will be stimulated by the £2bn kickstart scheme for 16-24-year-olds.

“The chancellor has risen to the occasion and has set Britain on course for recovery.”

Midlothian South, Tweeddale and Lauderdale MSP Ms Grahame is disappointed by Mr Sunak’s array of initiatives, however.

“The Scottish Government called for an £80bn stimulus package to build a strong, green and inclusive economic recovery, and while the measures on VAT for tourism and hospitality are welcome, overall this package is a huge opportunity missed,” she said.

“It falls well short of delivering what is needed to boost the economy and protect jobs.

“There is no new capital spend, no extension to the furlough scheme for hard-hit sectors and no further support for households in financial difficulty.

“A half-price meal out is an insult to those struggling to put food on the table.

“Many of the initiatives are short-lived and do not provide long-term certainty for business or households.

“Instead, they will simply push the problems back to the end of the year when we will also have to deal with the end of the transition period with the European Union, and despite announcing new funding measures worth up to £30bn, most of it bypasses devolution and does not provide the Scottish Government with the funding we need to enable us to tailor an economic response that meets Scotland’s needs.

“Like all governments, we are facing huge spending pressures, but we do not have the tools that others have to meet them.

“Along with the governments of Wales and Northern Ireland, we set out a reasonable, proportionate set of new financial powers that would enable the Scottish Government to respond effectively. Regrettably, the UK Government has turned a deaf ear to those needs.”

South Scotland Labour list MSP Colin Smyth is also unconvinced by Mr Sunak’s efforts, saying: “Massive intervention was needed by the chancellor due to the slowness of government to tackle a health crisis which has turned into an economic crisis, but, sadly, what has been announced falls short of what was needed.

“The proposals announced will simply not scratch the surface of the economic tsunami that is battering the area.

“We didn’t get the back-to-work budget needed, and I suspect the chancellor will be forced to come back in a few weeks to announce more action as the economy goes into a deep recession.

“The decision not to extend the furlough scheme for sectors such as tourism and hospitality, and others that won’t need staff to fully return for some time, is a massive and real blow to this area.

“That decision will mean there will be more redundancies as the scheme begins to be reduced and is ultimately ended in October.

“The furlough scheme should have been extended for some sectors until next year, but instead we will now see many companies who can’t afford to pay workers lay people off, adding to an already record high level of unemployment.

“There are also gaps in grant schemes for businesses, and many have lost out locally.

“That’s why I’ll continue to put pressure on both the Scottish and UK governments and their agencies to bring forward new grant schemes, including a dedicated south of Scotland scheme to allow local flexibility in how that is allocated.”

Fellow South Scotland list MSP Michelle Ballantyne disagrees, though.

“I wholeheartedly welcome the economic support measures announced by the chancellor,” said the Walkerburn-based Tory representative.

“It is vital that as we turn the tide on Covid-19 in Scotland, we are able to preserve jobs, protect the hospitality industry and kick-start the economy.

“The new job retention bonus will help employers to bring furloughed staff back into long-term employment and will preserve jobs across the country.

“VAT has been cut for the hospitality industry, which will mean more money for Scottish tourism and for the food and drink industry, Scotland’s third-largest employer.

“Yesterday’s announcement is one of the most extensive economic support programmes in years and will be essential in securing Scotland’s economy post-Covid.

“It is a keen reminder of how much Scotland benefits from the union and how a united approach to the Covid-19 crisis will strengthen the Scottish economy.”