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Scottish hospitality businesses ‘hang in the balance’ without government support

Published:  18 December, 2023

New analysis has revealed that thousands of Scottish hospitality businesses will be left unsupported if a rates relief isn’t included in the Scottish Budget tomorrow (19 December).

Research from the Fraser of Allander Institute (FAI), suggests 10,000 hospitality businesses would stand to benefit from the same rates relief recently implemented in England by chancellor Jeremy Hunt. 

In last month’s Autumn Statement, the government announced its decision to extend the 75% business rate relief and employers’ National Insurance relief for another year, plus a freeze on the small business multiplier (raising business rates in line with inflation).

According to the FAI, 10,000 businesses, which are ineligible for the small business bonus scheme, would be left ‘unsupported’ without a rates relief. 

UKHospitality Scotland executive director Leon Thompson said: “The Scottish government has a golden £230 million opportunity to show its support for one of Scotland’s most important sectors – hospitality, leisure and tourism – by introducing a business rates relief scheme.

“These figures clearly show what is at stake and the fate of almost 10,000 businesses hang in the balance, as they await tomorrow’s Budget.”

Thompson continued: “If rates relief is introduced, they have some degree of certainty and can fulfil plans to invest in and grow their businesses, delivering economic growth and creating even more jobs.

“If the Scottish government chooses not to act, those businesses will have no support whatsoever. Some will be closer to closing for good and others will remain fighting for survival and unable to invest. This significantly impacts on our sector’s ability to deliver economic growth for Scotland and create more jobs.”

Earlier this month, the Scottish Beer & Pub Association (SBPA) and the Scottish Licensed Trade Association (SLTA) issued a joint appeal to support the sector after it emerged English businesses would receive a rate reduction. 

Pubs outside Scotland benefited from the reduction last year, offering some relief to businesses dealing with mounting overheads and costs. However, the Scottish government chose not to pass on the reduction. This resulted in permanent closures in the sector accelerating at double the rate in Scotland (1.7%) than in England (0.75%), the two associations argue – and are now calling on Holyrood to pass on funding to Scottish hospitality.

“The failure to pass on rates relief last year was a devastating blow for Scotland’s pubs and bars and has resulted in a record number of permanent closures,” the SBPA and SLTA said in a joint statement.