LACK OF BUSINESS SUPPORT UNFAIRLY HINDERING SCOTTISH HOSPITALITY

Scottish hospitality businesses are now operating at a significant disadvantage to counterparts in England and Wales, as a result of the Scottish Government’s reluctance to support businesses. In a letter to the Scottish Government’s Finance and Public Administration Committee, UKHospitality Scotland highlighted the urgent need for short-term business rates relief, in order to diminish the jeopardy many businesses face.

Scottish businesses have not benefitted from any business rates relief since June last year. In comparison, English businesses have been supported by relief since the pandemic and will continue to be supported by up to 75% relief on business rates in the coming financial year. This support in England resulted in Barnett consequentials of £1.5 billion, yet none of that money has been allocated to support hospitality. In addition, the UK Government’s announcement to significantly reduce the energy support available to businesses from 1 April will deliver a major financial blow to Scottish hospitality. On top of rateable values increasing for many and a lack of relief, hospitality venues are finding themselves with hard financial decisions to make.

UKHospitality Scotland Executive Director Leon Thompson said: “The decisions facing Scottish hospitality businesses early this year are stark, and will prove fatal for many.

Cost increases are seemingly endless for venues, whether that’s losing current levels of energy support in April, business rates continuing to increase, or food and drink supplies costing record amounts.

“While no business in the UK is free from the effects in inflation, it’s becoming clear that the inaction and lack of business rates relief from the Scottish Government means we are falling quite sharply behind England and Wales.

“For example, rateable values in Scotland appear to have risen almost across the board in Scotland, while the opposite seems to be true in England. We’ve heard from members that many are set to pay tens of thousands more in business rates here, compared to similar businesses in England.

“This is not sustainable and will have long-term ramifications for Scottish hospitality. If running a business in Scotland permanently becomes more expensive, with no relief for businesses, we could see investment suddenly diverted away from the sector and a loss of skilled workers in Scottish hospitality.

“This has to be avoided at all costs. We urgently need to see the Scottish government introduce business rates relief at or near the levels in England and Wales, otherwise, businesses will fail. In the long-term, the lack of parity we see in the business rates system between nations underlines its ineffectiveness and the need for complete root and branch reform.”

SLTA VOICES ‘VERY SERIOUS CONCERNS’ FOR HOSPITALITY

SLTA voices ‘very serious concerns’

for the hospitality sector despite UK Government’s new energy support scheme.

The SLTA (Scottish Licensed Trade Association) has expressed “very serious concerns” over the introduction of a new £5.5 billion scheme to support businesses with their energy, announced yesterday in the House of Commons.

With the current cap on the wholesale unit cost of electricity and gas for firms set to expire at the end of March, it will be replaced with a new scheme that offers a discount on wholesale prices rather than a fixed price.

Colin Wilkinson, SLTA managing director, said that struggling hospitality businesses were desperate for financial support and queried how effective this new scheme will be, given the vastly reduced reduction in the level of support at a time when businesses are recovering from the pandemic and still paying off debts incurred during Covid.

He said: “Many businesses in the hospitality sector in Scotland have had a bitterly disappointing December – normally one of the year’s key trading periods for the sector – as a direct result of the economic crisis, train strikes, poor late-night public transport and lack of taxi provision in some towns and cities. We’re into the second week of January and these challenges remain.

“Obviously we are grateful for any government support but this new Energy Bills Discount Scheme does not, in our view, offer much hope for vulnerable sectors like hospitality when you consider that energy costs now account for around 8-10% of turnover for an average pub or bar. Energy is the second-highest cost for hospitality venues.