City leaders warn new system will impact business survival

City leaders have warned of the “immediate impact” Scotland’s latest restrictions will have on jobs and the ability of businesses to survive.

The First Minister announced how each local authority would be affected by the new five-tier system on Thursday, with the framework coming into effect on Monday.

It will see the majority of councils placed into the second toughest level three – a move which has drawn criticism from leading business figures, who have warned of the potential for mass job losses.

Nicola Sturgeon insisted the system was the best way to avoid a full lockdown and control spread of the virus, which has claimed around 4500 lives in Scotland.

Liz Cameron, chief executive of the Scottish Chambers of Commerce, said: “Whilst the First Minister did not announce a full national lockdown, the majority of Scotland has been designated within level three.

“This will have an immediate impact on businesses confidence and survival. In addition, the consequences of imposing additional travel restrictions between areas and levels will result in decreased tourism, also impacting on retailing and hospitality.”

Organisations representing licensed premises are taking legal action against the Scottish Government, with pubs and restaurants forced to restrict their opening hours.

Stephen Montgomery, spokesman for the Scottish Hospitality Group, added: “This approach is neither proportionate nor sustainable.

“The government must acknowledge that the new restrictions will end in hundreds, if not thousands, of job losses.”

People are also being asked to stay in their own council areas, but Andrew McRae, policy chairman at the Federation of Small Businesses Scotland, was critical of how limits to travel would affect companies.

He said: “The travel ban outlined by the First Minister has significant implications for many businesses, like rural firms dependent on visitors from the city.

“At the earliest possible opportunity, ministers must explore alternative policies on this front. In the meantime, they must provide real help for businesses hit by this change.”

Funding options have been brought forward in the form of grants to help businesses which will be impacted.

The central belt currently has restrictions similar to level three while the rest of Scotland has measures comparable to level two.

No local authority areas have been placed under the lowest or highest levels – the latter would have forced non-essential shops, pubs and restaurants to close.

Sturgeon said: “I know travel restrictions are unwelcome and can be controversial but they are an absolutely essential part of any regional approach to tackling Covid.

“They are – unfortunately – a price we must pay for more targeted restrictions.”

Some local authorities have voiced disagreement over the level they have been assigned, such as Aberdeen City Council and Inverclyde Council.

A joint statement from Jenny Laing and Douglas Lumsden, co-leaders of Aberdeen City Council, said it had suffered a “greater extent of economic harm” because of its local lockdown in the summer.

A letter to the First Minister said: “Economic harm should be seen as a significant factor in decision making around the levels.

“For those reasons, we believe that Aberdeen should be placed on level one of the restrictions rather than level two to try and mitigate the economic harm now.”

Responding, Sturgeon said: “Desire for speedier progress understandable but these decisions have been taken carefully.

“We are at a crucial moment and it will take work in coming weeks to maintain progress and not have to return to the stricter restrictions many other countries are facing. Compliance is vital.”

Inverclyde Council leader Stephen McCabe had pushed for his area to be placed in level two, with some additional restrictions if necessary.

He said: “As part of the national negotiations with the Scottish Government we pressed that Inverclyde, because of our lower rates, could have started in this new system at tier two.

“If needs be we could have even accommodated a new ‘tier two plus’ if it was felt there was a need for some limited travel restrictions.”