Coronavirus: Edinburgh MP Tommy Sheppard calls for direct support for small businesses from UK Government

An Edinburgh MP has called for direct support for small businesses in the hospitality industry to avoid the sector being “grievously damaged” by the coronavirus crisis.

Tommy Sheppard, the SNP MP for Edinburgh East, wrote to the Chancellor Rishi Sunak calling for direct support to businesses with fewer than 100 employees to cover the cost of paid leave.

Mr Sheppard, who has been an MP since 2015, owns The Stand comedy club on York Place, run by his company Salt ‘n’ Sauce Promotions Ltd.

In a letter to Mr Sunak, Mr Sheppard warns that bars, pubs and clubs are seeing a “dramatic and permanent” loss of income with the crisis in the industry likely to “escalate rapidly” unless action is taken.

Mr Sheppard wrote: “Many bars, restaurants and venues have closed their doors and have no income coming in at all. They are experiencing a dramatic and permanent drop in income. Many are running out of money to pay staff and are already making people redundant. This will escalate rapidly unless urgent action is taken.

“Loans will be welcome for some but for many this will simply delay the problem; it will not mitigate it. I say this as someone with previous direct experience and ongoing interest in this sector.

“I’d ask that the government provide direct support to businesses with less than 100 employees to cover the cost of paid leave for staff who are unable to work because their workplace has closed in support of the government’s response to the outbreak.”

Mr Sheppard said his scheme could allow for businesses to credit payments made in their tax and national insurance returns, and allow businesses to borrow money against the credit.

He added that staff payments would be funded at the minimum hours of their contract, or the average weekly wage for those on zero-hour contracts.

Mr Sheppard said: “Most importantly this scheme as well as supporting businesses also puts money directly into the hands of employees themselves as it can only be drawn down once actual payments are made through payroll.

“Without such a scheme many small companies will fail and not be there when the crisis does end so any recovery afterwards will be all the slower.

“And of course, a lot of good venues, bars and restaurants will have gone to the wall, fundamentally damaging the diversity and creativity of our hospitality industry. This does not need to happen.

“The cost of not doing something to stop imminent redundancies could be enormous as this sector of the economy would be grievously damaged and take a long time to recover.”

The UK Government announced a major financial package of support at a press conference yesterday, including £330bn in loans – equivalent to 15 per cent of GDP.

Extended business rates relief and a three month mortgage holiday for people in financial difficulty will also be implemented.

Prime Minister Boris Johnson said in the same press conference that the government would act like a wartime government.

He said: “We must act like any wartime government and do whatever it takes to support our economy.”