SCOTLAND’S hospitality sector is being stifled by uncertainty surrounding the tax regime after next year’s independence referendum, as the Scottish Government’s record on taxation has led to caution among investors in the property sector.
There are fears that businesses north of the Border could find themselves subject to higher taxation than elsewhere in the UK in an independent Scotland.
Why risk their investment in a small country where there is uncertainty about taxation?
A multitude of potential hospitality sector investors in the emerging Bric countries (Brazil, Russia, India, China) regard the uncertainty surrounding the make-up of Britain as too much of a risk to make it a viable investment – with the exception perhaps of London and Aberdeen, whose local economies have continued to perform well throughout the duration of the recession.
Consequently, outwith these two locations, the prospect for any significant investment flowing into Scotland’s hospitality sector from overseas prior to the referendum would appear to be remote.
While I remain steadfastly non-partisan on the question of independence, I share the concern expressed by a growing number of business people about the level of discourse between the two sides of the referendum to date, which has been disappointing and has yet to present the Scottish public with the detailed information required to enable us to make an informed decision.
I am hopeful, however, that a more meaningful discussion will start to emerge now that both the Scottish and UK governments have started to publish documents illustrating their cases ahead of the vote on 18 September, 2014.
I would argue, though, that, regardless of whether you are for or against independence, the timing of the referendum could not be worse, coming as it does at the bottom of what has easily been the worst recession for at least 100 years.
For that reason, I would suggest that “prudence” is a word which has become exceptionally valuable in the current global economic situation.
• Maurice Taylor is founder and chief executive at leading independent hotel management company Chardon Management