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The road to recovery: how the UK Government's financial packages have helped Scottish firms hit by the COVID-19 pandemic come back after lockdown

The UK Government has given firms across Scotland vital support to protect jobs and help them weather the storm of the COVID-19 crisis. In March [2020] Chancellor Rishi Sunak announced a package of loans, grants and tax breaks to mitigate the fall-out from the pandemic, followed in July by the Plan for Jobs.

As coronavirus spread, the hospitality sector was hit especially hard, and Ruth Sutherland, who runs the Carfraemill Hotel in the Lammermuir Hills, was soon seeing bookings cancelled. 'It felt like it hit the restaurant and hotel trade quicker than it hit the general population,' she says.

With 40 staff to look after, the pressure was on. Over Mother's Day weekend, Ruth sold 400 takeaway afternoon teas, but she realised that wasn't going to be enough to sustain the hotel over the coming months.

'It was so stressful for everyone - mum in particular,' says Ruth. 'She'd spent 23 years building up the business, and to watch it close in a matter of days was terrifying. We decided to shut before the furlough scheme was announced, so the most emotional thing was telling the staff, when we didn't even know what we were going to do about their wages.'

So Ruth felt huge relief when the UK Government announced the Coronavirus Job Retention Scheme (CJRS), which allowed businesses to pay 80 per cent of wages until October. 'We had something to turn to,' she says. 'Being part of the local community, it's the staff you care about.'

Now the hotel has reopened with social distancing in place, and Ruth has been able to bring her staff back. She's also eligible for the £1,000 Job Retention Bonus [which is due to launch in] January [2021] for every employee she brings back from furlough, and has seen the restaurant buzzing again thanks to the recent Eat Out To Help Out scheme.

It's not just the hospitality industry that's benefited from the package of financial support from the UK Government. John O'Malley, who runs a chain of estate agents, was also able to look after his 15 staff thanks to the CJRS when business slowed due to the pandemic.

'It was worrying because salaries are a big part of our annual expenditure,' he says.

'But I was impressed by how quickly the UK Government put their packages in place. I felt they really helped. The money came through a lot quicker than I expected too. We got it within three or four days.'

Now John's been able to bring the staff back to work. 'I felt that some of them were at their wits' end, so when we opened the offices back up, with social distancing measures in place, they were more than happy to return,' he says.

'Without that UK Government support, I would likely have been faced with a downward spiral of cutting staff and closing offices,' he adds. 'I'd have had to take stock of what was going on and decide whether it was worth going forward with the bills and costs involved in running a business like this. It would have been a very hard time to come out of. The UK Government schemes really allowed us to come back.'

Government help for workers: The UK Government is now supporting more than 930,000 jobs in Scotland - a third of the workforce. Furlough and self-employed schemes are part of an unprecedented UK Government package to help businesses and individuals across Scotland during the pandemic. The UK Government loaned more than £2.3billion to 65,000 Scottish businesses, deferred VAT bills and increased support to individuals through Universal Credit. £6.5billion of direct funding was allocated to the Scottish Government. VAT was cut to 5 per cent to help restart tourism businesses. Over 3,100 restaurants in Scotland signed up for Eat Out To Help Out. A £2billion kick-start scheme will create thousands of high-quality jobs for young people.

Analyse the expected effects of the UK Government's fiscal support measures on the Scottish businesses in the face of the COVID-19 challenges. Discusses how various fiscal measures can influence an economy. Use these concepts and appropriate evidence from Case Study II to answer the question.