“Small and medium-sized businesses have raised concerns over an 'unfair' disparity in emergency support grants north and south of the Border. Scottish Conservatives accuse SNP ministers of making things worse for the economy” – Herald, April 12, 2020


The Scottish economy is very different from south of the Border. A one-size solution to help business will only hurt Scottish businesses and Scottish jobs. The Scottish Government is supporting endangered transport, fishing and hospitality sectors, while eliminating the business rate for all retailers for a period after the coronavirus emergency is over so they can rebuild.


The UK Government has provided an emergency support package for businesses shut down by the coronavirus crisis. The Scottish Government has received an extra £2.2 billion under the Barnett formula to provide similar business help north of the Border. However, the Scottish Government has decided to apply the funding in a slightly different manner to England, due to the different structure of Scottish business. The aim is to maximise the number of businesses receiving aid.

The Scottish Government Coronavirus Business Support Fund is being administered by local authorities, not the Government directly, in order to speed up delivery. It provides for a one-off £10,000 to all business rate payers already in receipt of rates relief through the Small Business Bonus Scheme. There is a separate grant of £25,000 available to businesses specifically in the retail, hospitality and leisure sectors, together with 100% rates relief. In addition, several strategic sectors (eg: fishing) have special support schemes, unlike in England.

The key criticism of the Scottish approach is that it offers the £25,000 grant to the retail, hospitality and leisure sectors on the basis of one per business rather than the one per outlet, as in England.


There are significant differences between the economies in Scotland and the rest of the UK which result in a unique need for business support during the present emergency. For instance, Scotland covers one third of the UK land mass with only eight per cent of the population. Due to the unique role that Loganair plays in providing connectivity in the Highlands and Islands, the Scottish Government is granting the airline 100% rates relief for a year. No other airline will receive rate relief in Scotland.

Coronavirus also has a differential economic impact in Scotland due to the different distribution of employment. For instance, the visitor industry accounts for around eight per cent of direct jobs in Scotland, compared to only five per cent for the UK as a whole. Also, tourism dominates the local economy in key parts of Scotland. Nearly a fifth of the entire workforce in Lochaber, Skye and Lochalsh, Arran and Cumbrae, and Argyll and Bute is dependent on tourism – the highest percentage of anywhere in the UK. As a result, the Scottish Government has prioritised the focused elements of its coronavirus business package to protect the visitor industry, lest whole swathes of the Highland and rural economy implodes permanently.

The Scottish Government is also offering a £10 million special grant package to the local fish industry – funding not available in England. Support goes to 650 seafood and fishing firms, many of whom lost their livelihoods with the collapse of export markets for langoustine, prawns and crab. An initial payment of 50% of two months’ average earnings will be made to owners of all full time Scottish registered fishing vessels of 12 metres length and under.

Note that the structure of employment in Scotland is different compared to England. More of the local workforce is employed in small and medium-sized firms than in England. Over 28% of workers in Scotland are in small companies of up to 49 employees, compared with 23% in England. This explains the Scottish Government’s attempt to cover as many companies in as many sectors, compared with in England.

If the Scottish Government allocated coronavirus business support exactly in line with policy in England, key sectors of Scottish society and business would pay a price. The point of having a devolved government is to make local decisions to meet local needs.


Retail businesses in Scotland operating more than one outlet (a bar chain for instance) will only be eligible for one £25,000 grant. However, the biggest fixed cost for most retailers is paying business rates. The vast bulk of emergency business support – in Scotland as well as England – has been applied to providing increased business rates relief, thus taking away this fixed cost.

Using part of the coronavirus emergency funding, the Scottish Government has effectively frozen increases in the poundage rate for all businesses, and provided a full year’s 100% non-domestic rates relief for those in retail, hospitality and tourism. The rates relief for retail premises is a major aid to protecting the high street economy as it covers 12 months, not just the period of the lockdown. This is of importance when it comes to rebuilding an individual business.

Note also that the majority of small businesses in Scotland already enjoy significant rates relief thanks to the Small Business Bonus (SBSS) introduced by the SNP in 2008. Over 100,000 Scottish businesses pay no rates at all – the best package of support available to small firms anywhere in the UK.


The Scottish Government's twitter account claimed that “hundreds more businesses are benefitting from our support compared with elsewhere”. This is factually true, given the extension of emergency business grants to firms in the airline, air facilities, fishing and fish processing industries.

However, in drawing up the initial emergency package ministers have had to estimate the take-up of various funding options. That said, the First Minister has indicated that the allocation of funds will remain under review. There is also an argument that the original emergency funding package from the Chancellor was inadequate given the gravity of the economic situation.


Deliberately misleading rather than false

The National: National Fact Check False