Economy – Page 16 – The NEN – North Edinburgh News

Over 54,000 Scottish SMEs fear closure from second UK lockdown

An estimated 35,070 Scottish SME*s (small and medium-sized enterprises) say it is likely their business will close permanently in the next 12 months as a result of the coronavirus crisis, with this figure rising to 54,776 in the event that a second national lockdown is introduced, according to a recent survey by Virgin Money*.

The research is reported in the latest Virgin Money Business Pulse, which provides a comprehensive insight into the performance of the UK’s SMEs and the environment in which they operate.

Across the UK as a whole, the survey, which was conducted in early September, revealed that almost one million SMEs fear they could close if there was a second lockdown. Two-thirds (66%) of SMEs said their profits were lower in April because of COVID-19 disruptions, including 21% whose profits took a hit of more than 50%.

Despite lockdown restrictions easing over the summer months, 64% of profits SMEs’ profits over the past 30 days decreased due to coronavirus-related disruption, compared to expected profits for this period prior to the outbreak of the pandemic. 55% of these businesses believe it will take more than six months for profits to recover to pre-lockdown levels.

Underlining the continuing precarious situation for SMEs, 17% of businesses say it is very likely or somewhat likely they will be forced to close permanently in the next 12 months. This number rises to almost a quarter (24%) when considered in the context of a potential second national lockdown, similar to that seen in March and April.

A key turning point for SMEs will be the closure of the Coronavirus Job Retention Scheme at the end of October. 42% of SMEs (excluding sole traders) expect their workforce to be smaller in December than it is in September. The new Job Support Scheme coming into force on 1 November is less generous than the furlough scheme, and so represents a significant withdrawal of fiscal stimulus.

However, the survey also uncovers some positives, with 15% of SMEs stating their profits were unaffected during lockdown and 10% noting their profits were higher, as demand for specific products, such as food and PPE, increased.

In addition, the lockdown has prompted almost a quarter (23%) of SMEs to update their strategy, 21% to reshape their vision, and 12% have improved existing products and services.

The Virgin Money Business Pulse covers the first half of 2020, which captures the start of the COVID-19 crisis.

The scale of the challenges experienced by SMEs is reflected in the Virgin Money Business Pulse, which fell to its lowest ever level of 32.9 in the second quarter of 2020.

This was driven by record-low scores in the revenue, GDP and capacity indicators, although gains were made in the business costs and lending indicators.

Rock bottom commodity prices and falling wages have provided some relief to SMEs in the form of declining business costs. Similarly, government-backed loans as part of the fiscal response to the pandemic, led to a record jump in SMEs’ borrowing, which has improved the lending indicator.

Elsewhere in the Virgin Money Business Pulse, the new Regional Rebalancing Tracker, which records regional economic inequalities in the UK, reveals the economic divide between London and the South East and the rest of the UK has continued to widen in the past six years.

Scores are calculated based on a region’s convergence to the level of economic prosperity and opportunity in London and the South East. The tracker reached a record low of 38.6 points in Q2 2020, with the lowest levels of convergence in the North East of England and the East Midlands.

Scotland’s individual Regional Rebalancing score was 37.6 in Q2 2020, with a weak rate of business creation weighing on the overall score. Productivity in Scotland is, however, the highest in the UK outside of London and the South East.

It is estimated that in 2020, workers in London and the South East generated on average £37.69 per hour worked. In Scotland, the corresponding figure is £30.13. This means that for every pound of output generated by workers in London and the South East, workers in Scotland generate an estimated 80 pence in the same amount of time.

Gavin Opperman, group business director at Virgin Money, said: “The results make for sober reading, but they are unsurprising given the extraordinary disruption of the last six months.

“The COVID-19 pandemic has caused the deepest recession on record and recovery is slow, despite the national GDP figures regaining ground. The UK’s SMEs have experienced unprecedented strain, with sales and profits affected by workplace closures, supply chain disruption, diminished productivity and declining household incomes.

“Despite the pickup in economic activity in the summer months, businesses are by no means out of the woods. As we head into the autumn and winter months with newly introduced restrictions, the next six months will be critical for many businesses.

“SMEs have shown tremendous resilience and innovation this year, with some excellent examples of creativity to pivot business models and maintain operations. But there is no doubt there are tough times ahead.

“On a brighter note, the pandemic may offer SMEs the chance to continue longer-term with the new and more flexible work patterns the pandemic necessitated, helping to rebalance the spread of wealth and opportunity across the country.

“We will continue to focus on how we can best support the businesses we work with. The future is always hard to predict, perhaps more so now than ever, but we will aim to be the best partner we can be as the UK navigates through the economic recovery from the pandemic”.

*Calculated by The Centre for Economics and Business Research (CEBR), with research conducted by Censuswide from 04/09/20 to 07/09/20, with 501 SME decision makers

Alister Jack responds to latest Scottish GDP figures

Scotland’s GDP increased by 6.8% in July, according to statistics announced today by the Chief Statistician. The increase in the latest month follows revised estimates of 6.7% growth in June and 3.1% May, and falls of 20.1% in April and 4.9% in March.

Although GDP has increased for the last three months, it remains 10.7% below the level in February, prior to the direct impacts of the COVID-19 pandemic.

In July there has been further growth in the three main sectors of the economy. Output in the Services sector is estimated to have increased by 5.5% compared to June, output in the Production sector increased by 8.6%, and Construction sector output is estimated to have increased by 23.4%.

Read the monthly GDP Estimate for July.

Commenting on the publication of Scottish July GDP figures yesterday, Scottish Secretary Alister Jack said: “As the Prime Minister said last night, the struggle against covid is the single biggest crisis the world has faced in our lifetimes.

“The UK Government is focussed on stopping the spread of coronavirus and keeping people safe, while doing everything we can to protect the economy.

“Through the furlough and self-employed schemes, we directly supported more than 930,000 jobs in Scotland, a third of the workforce.

“Now, the Chancellor’s comprehensive Plan for Jobs is bringing in the Job Retention Bonus, creating new jobs for young people through the kick start scheme, doubling the number of work coaches, and are supporting jobs in the tourism and hospitality sectors through a VAT cut.”

Background points:

The UK Government has directly supported more than 930,000 jobs in Scotland, a third of the workforce through the furlough and self-employed schemes.
Over 1.8 million jobs in the hospitality sector have been supported through the Eat Out to Help Out scheme with more than 6.3 million meals eaten in Scotland.
The UK Government has loaned more than £2.3 billion to 65,000 Scottish businesses.
An additional £6.5 billion in Barnett Consequentials has been provided by the UK Government to the Scottish Government since March 2020.

Chancellor Rishi Sunak is expected to make an announcement on a new emergency employment scheme to replace the current furlough arrangements later today.

Cut unemployment by unlocking public service jobs, says TUC

NEW TUC REPORT identifies 600,000 existing public service vacancies and staff gaps that government could unlock quickly to cut jobless rate
The more people in work, the faster we will work our way out of recession, says TUC

A new TUC report has set out proposals for a public sector jobs drive to stave off mass unemployment and help the UK quickly recover from the Covid-19 recession.

The UK entered the Covid-19 crisis with our public services weakened by a decade of cuts. But public service workers gave their all to keep essential services going.

As we move out of the public health crisis, we are moving towards an economic crisis, with the Bank of England warning of mass unemployment with 2.5 million people out of work by the end of the year.

Creating decent jobs

The TUC’s report sets out a plan for public sector jobs to contribute to the fast employment growth the UK now needs.

It identifies the additional staff required across the public sector to fill vacancies, address shortfalls in provision and meet future need.

The union body is calling for government to urgently unlock the 600,000 jobs identified, including:

135,000 in health
220,000 in adult social care
110,000 in local government
80,000 in education
50,000 in civil service / public administration

Taken together with proposals published by the TUC in June to create 1.25 million jobs by fast-tracking green infrastructure investment, this plan could deliver a total of 1.85 million new jobs in the next two years.

Powering recovery

The TUC says that the government-led jobs drive would help support a stronger and faster private sector recovery too, with opportunities in supply chains and from the boost to spending power across the economy.

And it would help protect the Treasury from the revenue shortfall arising from the downside recovery scenario set out by the Office for Budget Responsibility (OBR).

Under the OBR’s downside scenario, peak unemployment would be two million higher than for the upside scenario. TUC analysis of OBR data finds that the Treasury would lose out on £520bn in revenue over the next five years on the downside scenario relative to the upside.

The TUC says that the government must invest now to put the UK on the upside path – by preventing mass unemployment.

Otherwise the nation will suffer the high costs of mass unemployment, weak revenue and slow growth for many years ahead.

TUC General Secretary Frances O’Grady said: “Working people carried the burden of the pandemic. They must not bear the brunt of the recession. The government must go all out to protect and create jobs and prevent the misery of mass unemployment.

“The more people we have in work, the faster the recovery will be. But ministers are sitting on their hands. It’s absurd to leave unfilled vacancies and unmet need in public services when unemployment is rising. Ministers should urgently provide the funding that will unlock existing public services vacancies and create good new jobs.

“Our plan to invest in good public services jobs will help workers avoid unemployment. It will strengthen the vital services that we all rely on. And it will get people out spending in local business and services. That’s how to drive the recovery forward.”

congress-jobs-story_report Download

– TUC Congress 2020: The TUC’s 152nd annual Congress takes place today and tomorrow (Monday 14 and Tuesday 15 September).

For full details of the programme, how to watch debates and how to participate in digital fringe meetings, go to: https://www.tuc.org.uk/Congress2020

High street footfall increases but big cities struggle as people continue to work from home

Visitor numbers recovered to pre-lockdown levels in many places
But latest tracker data shows no increase in people returning to the office since June
Centre for Cities call for Government to offer further help to impacted retail and hospitality workers if footfall remains low at a time of continued uncertainty

New data from the Centre for Cities’ Street Recovery Tracker, in partnership with Nationwide Building Society, reveals that while footfall in many of the UK’s town and city centres recovered to pre-lockdown levels this summer the share of people returning to the workplace has not increased since late June, despite the UK Government’s campaign to get people back into offices.

Centre for Cities and Nationwide are working together to better understand how large cities and towns continue to be impacted by Covid-19, particularly if the recent rise in cases is sustained.

Overall city centre footfall up by 7% in August

According to mobile phone tracking data, despite the continued reluctance of people to return to their places of work, overall town and city centre footfall increased by seven-percentage points to 63% of pre-lockdown levels since the beginning of August.

In 14 of the UK’s 63 largest cities and towns, city centre footfall in August exceeded pre-lockdown levels. Seaside towns such as Blackpool, Bournemouth and Southend and smaller cities such as Birkenhead and Chatham proved particularly popular with visitors.

Again, overall footfall in larger cities remains well below the national average. In Central London footfall is still at just 31% of pre-lockdown levels, in Manchester it is 49% and in Birmingham it is 52%.

*Where has overall city centre visitor footfall recovered the most?*
Rank	City or town centre	Total city-centre footfall as a percentage of pre-lockdown levels (HIGHEST)	Rank	City or town	Total city-centre footfall as a percentage of pre-lockdown levels (LOWEST)
1	Blackpool	141	1	London	31
2	Bournemouth	133	2	Manchester	49
3	Birkenhead	124	3	Birmingham	52
4	Southend	116	4	Oxford	57
5	Chatham	115	5	Leeds	57
6	Burnley	111	6	Nottingham	59
7	Basildon	110	7	Cardiff	61
8	Doncaster	110	8	Sheffield	63
9	Portsmouth	106	9	Bristol	63
10	Telford	106	10	Leicester	64
*UK city average: Total visitor footfall is now at 63%, compared to pre-lockdown. Week commencing 24 August. Source: Locomizer*

Where is city and town centre footfall back to pre-lockdown levels?
BlackpoolBournemouthBirkenheadSouthendChathamBurnleyBasildon	DoncasterPortsmouthTelfordWarringtonWiganSunderlandHull
*Cities with a footfall score at or above 100% of pre-lockdown levels week commencing 24 August.* *Source: Locomizer*

But levels of people returning to their workplace remains flat

The data shows weekday worker footfall in the centres of the UK’s largest cities and towns remains at just 17% of pre-lockdown levels on average – exactly the same as it was at the end of June.

The share of people returning to their places of work is even lower in many of the largest and most economically prosperous cities with London, Leeds, Birmingham, Manchester and Cardiff all still below the UK city average.

Recovery has been stronger in smaller cities and large towns where weekday worker footfall is on average 27% of pre-lockdown levels. In Mansfield the share of people back at their place of work is now at 42% of what it was in February. However, nowhere has yet reached even half of pre-lockdown levels, so the UK has a long way to go if office life is to ever return to ‘normal’.

*Where are people back in the office?*
Rank	City or town centre	Places with the LARGEST share of people back in their place of work, compared to pre-lockdown (%)	Rank	City or town	Places with the SMALLEST share of people back in their place of work, compared to pre-lockdown (%)
1	Mansfield	42	1	Oxford	9
2	Basildon	38	2	Leeds	13
3	Newport	36	3	London	13
4	Birkenhead	35	4	Birmingham	14
5	Blackburn	35	5	Manchester	14
6	Northampton	34	6	Cardiff	15
7	Stoke	34	7	Reading	16
8	Derby	31	8	Sheffield	16
9	Chatham	31	9	Liverpool	16
10	Wigan	31	10	Portsmouth	16
*UK city average: 17% of people back in their place of work, compared to pre-lockdown. Week commencing 24 August. Source: Locomizer*

The persistently low numbers of people going back to work in city centres, particularly in big cities, reinforces the concerns for the future of shops, cafes, restaurants and bars that depend on office workers for custom.

Centre for Cities’ Chief Executive Andrew Carter said: “Good weather, Eat Out To Help Out and a boost to domestic tourism have helped increase visitor numbers to the UK’s seaside towns, but we should not celebrate too soon. “

We do not know yet whether this will continue into autumn and our biggest cities, which we rely on to power the UK’s economy, are still struggling in the wake of lockdown.

“There is little indication that workers are heeding the Government’s call to return to their offices and city centre restaurants, pubs and shops face an uncertain future while they remain at home. So, unless we see a big increase in people returning to the office, the Chancellor must set out how he will support the people working in retail and hospitality who could soon find themselves out of a job.”

Mandy Beech, Nationwide’s Director of Branches, said: “This latest research tells us Britain’s city and town centres continue to see significantly reduced footfall despite the nation having emerged from lockdown some time ago.

“However, there are positive signs that visitor numbers are picking up in many regional areas. While we can all hope life returns to normal quickly, the reality is that progress will be both uncertain and slow as workers look to return to their offices over the coming months.

“As an organisation rooted in the UK’s cities and towns, we want to do what we can to serve our members as the nation rebalances itself.

“During lockdown we challenged ourselves to keep 90 per cent of our branches open and today that stands at 98 per cent. While our own footfall has fluctuated, our branch employees have been able to support call-centre colleagues to help meet demand.

“As a vital service, we will continue to work in this way as we understand and respond to the needs of our members at this time.”

Regenerating communities

£30 million to support economic recovery

All of Scotland’s 32 local authorities and more than 25 individual community regeneration projects will receive a share of £30 million of new investment for regeneration and town centres.

The funding will be available immediately through the Regeneration Capital Grant Fund (RCGF) and the Town Centre Fund (TCF), both delivered in partnership between Scottish Government and COSLA.

Edinburgh’s share of the Town Centre Fund is £954,000.

The Govanhill Baths refurbishment in Glasgow, Midmills in Inverness, which will support creative industries and cultural social enterprises in the Highlands; and the Mossedge Centre, which will be a multi-purpose facility for use by the surrounding communities in Linwood Renfrewshire are among the community led regeneration projects that will benefit from this funding.

Communities Secretary Aileen Campbell said: “We want to go beyond rebuilding – to refresh and reform and help drive the social and economic renewal necessary to achieve the best future for Scotland.

“This further £30 million capital funding for regeneration and town centres will stimulate local construction across Scotland and support disadvantaged areas in the recovery.

“Communities are best placed to identify specific needs and aspirations and this regeneration funding enables the delivery of a wide range of locally-developed projects to be made into reality.

“Our places must work for our communities, and the Town Centre Funding will build on the success of last year’s fund. With it, local authorities will be able to drive forward projects that help people live better locally and reduce their carbon footprint while driving footfall to local businesses.”

COSLA Environment and Economy Spokesperson Cllr Steven Heddle said: “The additional challenges facing Scotland’s most vulnerable communities due to the coronavirus (COVID-19) pandemic means there has never been a more important time to strengthen the economic, social, and physical wellbeing of our places.

“This additional funding for the Regeneration Capital Grant Fund and Town Centre Fund will support the regeneration aspirations of our communities, and also accelerate the delivery of projects to support the recovery, tackle disadvantage and deprivation and support jobs.”

Linwood Community Development Trust will receive £400,000 from the RCGF this year to bring forward completion of the Mossedge Centre.

Trust Manager Kirsty Flannigan said: “Complemented by the existing 3G pitch, the Mossedge Centre will provide a resource for all within the local community, including a purpose-built home for our community run Roots Shop.

“Now we see the finishing line in sight, and can look forward to the post-pandemic future with confidence, knowing that this project will provide a legacy for present and future generations of the Linwood community.”

This funding will support accelerated delivery of projects this year, and forms part of the £230 million Economic Recovery Stimulus package announced by the Cabinet Secretary for Finance in June.

It includes:

an additional £18 million through the Town Centre Fund (TCF)
an additional £12 million through the existing Regeneration Capital Grant Fund (RCGF)

Briggs hails Eat Out to Help Out initiative

Almost 1.4 million meals were claimed throughout August in Edinburgh, at an average of £6.90 a meal, under the Eat Out to Help Out UK government scheme to get people back to restaurants.

The scheme gave 50% off meals, up to £10 per person through August on Mondays, Tuesdays and Wednesdays.

A total of £9,630,000 was claimed for across 465 registered restaurants in the capital.

Lothian MSP, Miles Briggs, has hailed the success of the Eat Out to Help Out scheme getting customers back into restuarants.

The figures also don’t yet highlight the figures from the last day of the scheme on Monday 31 August, meaning the final total will be higher.

Lothian MSP, Miles Briggs, said: “I am delighted that the Eat Out to Help Out scheme has been such a huge success in Edinburgh and that it has given restaurants a much needed boost after lockdown.

“The restaurant and hospitality sector is central to Edinburgh’s economy and the scheme will have helped many restaurants survive, as well as saving jobs.

“Almost £10 million in claimed discounts show just how big a success this scheme has been.”

Parliamentary constituency code	Parliamentary Constituency	Total number of registered restaurants²	Total number of meals claimed for³ ⁵	Total amount of discount claimed^{4 5} (£)	Average discount per meal (£)
S92	Scotland	8,543	6,333,000	38,607,000	6.10
S14000022	Edinburgh East	604	275,000	1,792,000	6.52
S14000023	Edinburgh North and Leith	533	269,000	1,842,000	6.84
S14000024	Edinburgh South	140	119,000	855,000	7.17
S14000025	Edinburgh South West	527	416,000	2,928,000	7.03
S14000026	Edinburgh West	522	319,000	2,213,000	6.94
		465	1,398,000	9,630,000	6.90

Edinburgh Airport chief: dark days ahead

An open letter to Humza Yousaf

Dear Cabinet Secretary,

The First Minister has said at her daily press briefings and in the Chamber that any life lost to Covid-19 is the loss of someone’s loved one and should rightfully be recognised as such.

Protecting public health has rightfully been the focus of the government’s strategy and we have always been clear that we understand the need to do that and have supported that work which is absolutely paramount at any time, not just during a pandemic. Airports and their process have safety at their core.

However, absolutely paramount at any time is also a strong economy, one that allows government to protect livelihoods, improve the lives of people and further Scotland’s ambitions and credentials at home and abroad.

Last night (02/09/20) I listened to your comments on STV and was dismayed to hear you say that although you were concerned about the impact of Covid-19 and quarantine on the aviation industry, “We can bring the economy back to life, we just can’t bring people back to life.”

Cabinet Secretary, I am sorry that you felt that such a comparison was appropriate. No-one in aviation has advocated trading lives for the economy, and it is unhelpful to be using anyone’s loss to make a political point that side-steps or ignores our open request for engagement in seeking better policies.

In all our engagement with your Government, we have agreed that health measures must be what we build policy around. It has never been in question because business aside, we are human beings first and foremost and we know the true cost of Covid-19.

But this isn’t a binary choice as you have seemed to suggest. It is not a choice between public health or the economy. It is not a choice because we need to do both if Scotland is to rebound and recover.

The First Minister’s Programme for Government this week made promises on jobs, especially the jobs guarantee for young people. That is an ambitious policy planning for Scotland’s future and that is to be commended but, and I’m sorry to be so blunt, you can’t guarantee anyone access to jobs that don’t exist. A strong economy will be key to this and is exactly why the Scottish Government needs to support businesses in sustaining and creating jobs if such promises are to come to fruition.

As an airport, we are a facilitator of many things, from business and tourism to education, research and culture, and all these things are drivers of economic activity. But we’re also one business in Scotland’s economy and there are many more who want to help and who want support from the government to get the recovery started.

Yes, rates relief your Government has put in place has of course been welcome, something we have said in public and in private. And yes, we know that it isn’t available in England or Wales. But what is and isn’t available in other parts of the UK is not our concern – saving Scotland’s aviation and travel industry and rebuilding our economy is.

A quarantine policy that is a travel ban in all but name makes this incredibly difficult, if not impossible. It is ineffective and unworkable as your own figures show and it is having a damning impact on a range of industries. If this is the path the Scottish Government is to continue down then there are some incredibly dark days ahead. I only have to look at my own business to see the real impact it is having. Saying goodbye to 250 colleagues through no fault of their own was one of the toughest experiences in my career. I don’t want others to have to do the same.

If we are to live with Covid-19 for months and years to come then this is simply not a sustainable approach. We need a robust testing regime that protects public health and provides confidence and reassurance to those who need and wish to travel.

We have to manage and mitigate the risk in the best way possible, and that simply has to be a dual approach with balanced attention given to health and prosperity.

Decisions taken now will have an enduring impact on the many quality jobs our industry supports up and down the country, and – if those are too cautious and short-sighted decisions, will significantly undermine the county’s future connectivity and competitiveness.

We are ready, willing and able to help design better systems and processes to protect the health of passengers and staff. We and our colleagues at AGS have spoken with the National Clinical Director, Jason Leitch to explore how best to partner with the Scottish Government on testing. We’re hopeful that our ideas are being listened to and we have a tentative path forward.

We have great respect for the First Minister’s leadership through this health crisis. However, we urge you to make good her words in recognising that the economic emergency is of equal importance to the health crisis.

The aviation and travel industries are not too big to fail. If the Scottish Government position remains as it stands, you are putting tens of thousands of jobs at risk in aviation the next few months alone. The knock-on risks to our tourism sector are even more profound and we would hope you might reflect carefully on our concerns and respond accordingly.

We urge you to reconsider your approach and work with us to find a way to protect public health and rebuild our economy. It is in Scotland’s best interest to do both.

Regards,

Gordon Dewar

Chief Executive, Edinburgh Airport

Scotland in recession after GDP fall

Scotland’s GDP increased by 5.7% in June, according to statistics announced yesterday by the Chief Statistician. The growth in the latest month follows an increase of 2.3% in May, and falls of 19.2% in April and 5.8% in March.

Although output has increased for the last two months, it remains 17.6% below the level in February, prior to the direct impacts of the coronavirus (COVID-19) pandemic.

In June there has been a wider pickup in activity than in May, with output increasing in all the main industry sectors, and in most of the sub-sectors within these.

For Quarter 2 as a whole (April to June), GDP is provisionally estimated to have fallen by 19.7% compared to Quarter 1 (January to March), after a fall of 2.5% in Quarter 1. Across the two quarters of contraction, output is estimated to have fallen by a total of 21.7% compared to 2019 Quarter 4.

This is the third release of new monthly GDP statistics for Scotland, and the first to include a provisional estimate for the whole quarter. These statistics have been produced by the Scottish Government to help track the economic impact of the COVID-19 pandemic, and are badged as experimental statistics (not national statistics) which means they are still in development.

The Monthly GDP Estimate for June.

Commenting on the GDP publication, Scottish Secretary Alister Jack said: “These figures confirm the significant impact of coronavirus on Scotland’s economy.

“The UK Government has put in place unprecedented measures to support people, right across the country, through the pandemic.

“We are supporting almost 900,000 jobs in Scotland through the pioneering furlough and self-employed schemes and have loaned more than £2.3 billion to 65,000 Scottish businesses. This is on top of an extra £6.5 billion of funding for the Scottish Government.

“The UK Government is doing all it can to drive our economic recovery. That includes our £1k job retention bonus, a £2 billion Kickstart scheme to create thousands of high quality jobs for young people, cutting VAT to restart tourism businesses and boosting hospitality businesses with our ‘Eat Out to Help Out’ scheme.

“We know that there are very real challenges ahead of us. The UK Government will continue to do everything possible, working with the Scottish Government, to support people in Scotland through this difficult time.”

Estimated GDP figures for June 2020 have been published by the Scottish Government.

Scotland’s onshore GDP (not including offshore oil and gas extraction) is provisionally estimated to have increased by 5.7% in real terms during June. This follows an increase of 2.3% in May and falls of 19.2% in April and 5.8% in March.

During March and April, output fell in nearly every part of the economy. In May the results were more mixed, with some parts of the economy seen to begin a pickup in activity, but many industries across the services sector experiencing further falls or remaining flat. In June, a much wider pickup in activity can be seen, with output estimated to be increasing in all Scotland’s main industry sectors, and in most of the sub-sectors within these.

The estimates show Scotland’s economic recovery in June was slower than the UK’s as a whole. The UK’s monthly GDP grew by 8.7% in June 2020, following growth of 2.4% in May 2020, whereas Scotland’s GDP grew by 5.7% in June and 2.3% in May.

Growth in Scotland’s retail, wholesale and motor trades sectors contributed 1.5 percentage points to Scotland’s GDP growth in June, compared with roughly 2.8 percentage points for the overall UK.

Despite the increases in May and June, Scotland’s GDP remains 17.6% below the level in February 2020, while the UK’s GDP as a whole has reduced by 17.2% compared with February 2020.

The unprecedented nature of this drop in output can be contrasted to the financial crisis and recession in 2008 and 2009, where Scottish GDP decreased by around 4% over the course of 18 months. Throughout the 2008 Recession, UK GDP shrunk by no more than 2.1% in a single quarter.

These results are provisional and likely to be revised in the coming months.

Helping young people into work

A total of £60 million will be invested in a Youth Guarantee to give all young people access to work, training or education, Economy Secretary Fiona Hyslop has confirmed.

An implementation plan for Scotland’s Youth Guarantee is currently being developed. Funding will come from the additional £100 million Scottish Government investment for employment and skills announced last month.

Speaking to Parliament, Ms Hyslop set out more detail about what the Youth Guarantee will aim to achieve.

She said: “The young people who will make up our future workforce are among those who have been hardest hit by this pandemic. We must support our young people and I want to send a clear message to them today.

“I can announce that the Scottish Government will be committing £60m of the £100m employability fund to support Scotland’s Youth Guarantee, targeted at those most in need of support. This will support young people in a range of ways to help make the transition into work.

“I will bring forward more detail on how we will use this investment with the implementation plan, but I can say now that it will be targeted at those most in need of support, to help them make the transition into work.

“To succeed, we must invest quickly to support a range of interventions to keep young people in work in the next few weeks, to encourage employers to recruit more young people, and to ensure we have enough provision in colleges and elsewhere in the system to prepare young people for future opportunities.

“We must work collaboratively across the private sector, third sector and public sector to ensure no one is left behind, and give them every opportunity in life.

“We want employers to have a clear leadership role. I will encourage employers in all sectors to come forward and support what I see as a crucial intervention to prevent coronavirus (COVID-19) leaving a lasting impact on the employment opportunities of our young people, but also to recognise and promote the valuable and positive role that young people have to play in our economy.”

The Youth Guarantee was one of the main recommendations of the Advisory Group on Economic Recovery.

The implementation plan is currently being developed by Sandy Begbie, who chaired the Developing the Young Workforce Group in Edinburgh, East Lothian and Midlothian and helped design the Edinburgh Guarantee for young people.

A total of £100 million for employment support and training was announced last month to tackle employment challenges. £10 million of this will be used to support a range of measures to recruit and retain apprentices.

Last week the Flexible Workforce Development Fund was doubled to £20 million, to allow employers to upskill and reskill workers for new markets. A further £1.5 million was announced for Business Gateway’s Digital Boost programme to help SMEs adapt to new online digital market challenges – almost trebling the capacity of the initiative for the remainder of this financial year.

Coronavirus support across every region and nation in the UK

New data published by HM Treasury reveals how businesses across every corner of the UK continue to be supported through government-backed coronavirus loan schemes.

new figures show government economic support is reaching every corner of the UK
businesses across the entire UK have received government-backed loans during outbreak – with more than 130,000 firms in devolved nations receiving £4.7 billion
data also shows that nearly 900,000 firms in England have benefitted from over £10 billion in business grants

Figures released by the Treasury show that more than 130,000 firms in Scotland, Northern Ireland and Wales have benefitted from £4.7 billion of coronavirus support through the government’s Bounce Back Loan and Coronavirus Business Interruption Loan Scheme (CBILS).

This includes:

loans and support worth more than £2.3 billion have been given to more than 65,000 firms in Scotland since the outbreak
around 41,000 businesses in Wales have received more than £1.4 billion in finance
and more than 25,000 businesses in Northern Ireland have received over £1 billion

The figures also show that businesses up and down England have also benefitted from more than £10 billion in business grants, with equivalent funding being made available to the nations through the Barnett formula.

more than 102,000 business properties in Yorkshire and the Humber received £1.1 billion in grants since the pandemic
alongside 119,000 grants made in the South West, to the value of £1.3 billion
and 131,000 business properties in the North West receiving over £1.5 billion in support

Loan schemes, grants and business rates holidays have supported businesses across all sectors. But the retail, construction and hospitality sectors, including hotels and restaurants, have benefitted the most.

17% of loans went to the construction sector, and all retail, hospitality, and leisure businesses benefitted from a 100% business rates holiday – demonstrating how government support helped those businesses that were impacted hardest by the pandemic.

Ahead of a visit to Scotland to see the impact of the government support schemes and meet people who have benefitted, Chancellor of the Exchequer, Rishi Sunak, said: “I recently set out the government’s next steps towards economic recovery and securing the UK’s long-term prosperity in our Plan for Jobs.

“As we embark on this next phase, the latest figures demonstrate that we are continuing to support jobs, incomes, and businesses across every corner of the UK.”

As well as loan schemes, grants and businesses rates holiday, around a third of employees in every region benefitted from the furlough scheme, in addition to support through the self-employed income support scheme, as the government moved quickly to support businesses across the whole country to protect jobs.

This is part of a package of over £50 billion in loans, £11 billion in grants, and 9.5 million people furloughed.

The Chancellor set out his Plan for Jobs last month, which will support jobs with the Job Retention Bonus to help businesses keep furloughed workers, and expand Worksearch Support including a Flexible Support Fund and a £2 billion Kickstart scheme to subsidise jobs for young people

The UK government is also creating jobs in the construction and housing sectors through funding to decarbonise public sector buildings, and protecting jobs with VAT cuts for hospitality and tourism, as well as the Eat Out to Help Out discount scheme. These schemes are union-wide, and support key industries across the whole of the UK.

This comes in addition to the government’s recent announcement that the devolved administrations in Scotland, Northern Ireland and Wales will receive a minimum of £3.6 billion in additional funding this year, on top of the £8.9billion confirmed since March to support the coronavirus recovery.

Stephen Pegge, Managing Director of Commercial Finance at UK Finance, said: “Lenders understand that times are tough for businesses up and down the country, but the industry has a clear plan to help them get through this crisis.

“Whether you’re a sole trader in a rural area or a company with hundreds of employees in a major city, the banking and finance industry stands ready to offer the right support to suit your needs and these figures demonstrate that funding is well distributed throughout the UK.

“Businesses should remember that any lending provided under government-backed schemes is a loan not a grant, and so should carefully consider their ability to repay before applying.”

Business Secretary Alok Sharma said: “Our unprecedented package of support has helped firms of all sizes, in all sectors, and in every corner of our United Kingdom.

“Today’s data shows just how big an impact our measures have had, providing breathing space for millions of businesses, safeguarding jobs and protecting people’s incomes.

“As we bounce back from the pandemic, we will continue to prioritise jobs and skills, while placing the environment at the heart of our recovery.”