Scottish hospitality businesses are now operating at a ‘significant disadvantage’ to their English counterparts, according to a leading industry body.
In a letter to the Scottish Government’s Finance Committee, UKHospitality Scotland has highlighted that Scottish businesses are in "jeopardy", having not benefitted from any business rates relief since June last year, while 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.
Scottish Licensed Trade News reports that England’s rate relief resulted in Barnett consequentials – extra money sent to the Scottish Government – of £1.5billion, yet none of that has since been allocated to support hospitality.
There are also fears that the difference could starve Scottish high streets of investment in hospitality, undermining efforts to regenerate towns and city centres.
UKHospitality Scotland executive director Leon Thompson said: “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 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."
Long-term impact
“This is not sustainable and will have long-term ramifications for Scottish hospitality,” he warned.
“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.”
The Scottish hospitality sector employs around 200,000 people and contributes £9billion to the economy.