Nightclubs will close from 27 December to tackle the transmission of Omicron which continues to spread rapidly.
The measure follows feedback from nightclubs on the impact of incoming restrictions needed to slow the spread of Omicron. It will affect around 150 clubs and will be reviewed after three weeks.
Nightclub premises will have the option of opening to operate with table service and physical distancing, in line with the requirements for other hospitality businesses.
Deputy First Minister John Swinney said: “Having engaged with the sector, we have concluded nightclubs should close.
“While it would be open to them to operate with physical distancing and table service – and that option will remain – we believe closure in regulations, combined with financial support, could reduce losses and help nightclubs weather what we hope will be a short period until they are able to operate normally again.
“The Scottish Government is acutely aware of the financial implications for many businesses. We will work with the nightclub industry to develop targeted financial support for businesses that will now be required to close.
“We are providing additional support of £375 million, including £100 million announced last week, to support businesses directly impacted by Omicron and will publish a full breakdown and allocation of funding as soon as possible.”
The regulations come into effect at 05:00 on 27 December.
The Night Time Industries Association (NTIA) is warning of an impending unemployment tsunami, with up to 24,000 jobs thought to be at risk within weeks, as a majority of struggling night-time economy businesses have now run out of cash to pay furlough contributions and fixed costs.
The Scottish Government released the latest Strategic Framework update on Friday, which confirmed businesses will be subject to the commercially unviable levels system of restrictions for many months longer despite all financial support being withdrawn by the end of April.
Worse still, there is no commitment or target date for the return to commercially viable trading for businesses in the sector, which is only possible when social distancing and all other legal restrictions end.
A survey this month of NTIA members confirmed the perilous state the sector is now in, with average Covid related debt reaching a wholly unsustainable £150,000 or more per premises, and businesses facing an imminent cash flow crunch.
The survey also confirmed that less than a quarter of premises have licensed outdoor areas, the vast majority are many months behind on rent or mortgage payments, fewer than a third have been able to trade viably at any point in the last year, and almost all cannot reopen or trade viably while social distancing remains.
These businesses have now exhausted financial resources. Cash reserves have been depleted, more borrowing is now impossible with no guaranteed opening dates and businesses are rapidly running out of cash to pay their fixed costs and furlough contributions.
Business insolvencies and mass job losses are now inevitable within weeks unless the Scottish Government acts urgently. The NTIA wrote to First Minister Nicola Sturgeon earlier this month highlighting the issues and requesting immediate crisis talks.
It is beyond disappointing that as yet we have had no response whatsoever.
NTIA Spokesman Gavin Stevenson said: “Our members have done the right thing, closed their previously successful businesses for the sake of public health, and gone deep into debt paying the enormous fixed costs and furlough contributions to keep staff employed for over a year now.
“We were the first to close and will be last to open. No sector has suffered more. But Government have consistently taken our sector for granted and refused to engage meaningfully with our representatives.
“Many of our members have been closed for over a year now, and virtually all have suffered crippling financial losses. In short, the money going out every month has been far greater than the money coming in, and government support has typically covered less than a quarter of this deficit.
“To add insult to injury government support has now ended while there is no end date to forced closure and other restrictions. Scottish Government now only has two options, provide substantial and immediate additional support for as long as it is mandated that our businesses stay closed and/or operate under the restrictions that make them unviable, or provide a clear route map with target dates for the end of all legal restrictions on capacity, activity, and opening hours.
“If neither of those options are forthcoming then our First Minister is, in effect, asking thousands of small Scottish business owners to bankrupt themselves.”
First Minister Nicola Sturgeon will make a statement this afternoon. She is expected to confirm the latest easing of restrictions will take place next Monday (26 April) and will include the reopening of hospitality, gyms and non-essential shops.
An SNP MSP has urged businesses in Scotland not to call staff back to work early while the coronavirus lockdown remains in place.
Gordon MacDonald, MSP for Edinburgh Pentlands, raised concerns that some organisations which operate in Scotland are now encouraging employees to return to work, contrary to official Scottish Government advice.
The UK government is asking those who cannot work from home in England to start returning to the workplace. But the First Minister said she was “not yet encouraging more people to go back to work” in Scotland so that we can continue to protect our NHS and save lives.
Scottish businesses will be able to reopen as soon as they can safely do so, and the Scottish Government is working with employers and trade unions to set out how staff could return to work safely and as soon as possible.
Gordon MacDonald MSP said: “The Scottish Government has been clear and consistent in its advice to stay at home except for essential purposes, and is not yet encouraging people to go back to work so that we can protect our NHS and save lives.
“However, it is concerning that some UK-wide companies, which have sites and employees based in Scotland, appear to be encouraging employees to return to work.
“It’s absolutely vital that the UK Government makes it clear that companies should following official guidelines from the devolved administrations, now that slight variations between Scotland, Wales, Northern Ireland, and England exist.
“We still have a long way to go to overcome this crisis. I would ask that all employers in Edinburgh and across Scotland follow Scottish government guidance, and I am very grateful that the vast majority of employers have been doing so throughout this pandemic.”
