Lack of support hampers Scottish hospitality

 ​In a letter to the Scottish government’s finance and public administration committee, UKH Scotland highlighted the urgent need for short-term business rates relief to ease the burden on businesses. 

Scottish firms have not benefitted from any business rates relief​ since June last year. In contrast, 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. 

The UK Government also announced it would reduce the energy support available to businesses from 1 April, which, according to UKH, will deliver a “major financial blow” to Scottish hospitality. 

UKH Scotland executive director Leon Thompson believed the decisions facing Scottish hospitality businesses early this year were “stark” and would prove fatal for many.​  

Lagging behind

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

Thompson added: “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." 

He gave the example that rateable values in Scotland appeared to have risen almost across the board, while the opposite seemed to be true in England.​ UKH had heard that many of its Scottish members were set pay tens of thousands more in business rates, compared to similar businesses in England.  

Long-term consequences

Thompson said this was not sustainable and will have long-term ramifications for Scottish hospitality.  

He continued: “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.”