Scots hospitality firms up to £110,000 worse off each than in England, says report from UKHospitality Scotland urging Holyrood to slash business rates

Trade body says Scottish Government is making “active choice” not to support hospitality venues.

Hospitality venues in Scotland are set to be up to £110,000 worse off than their English peers, with an average pub at a £15,000 disadvantage, enough to cause such a business to fold, due to unsupportive Scottish Government policy, according to major players in the sector.

UKHospitality Scotland – which says it represents more than 8,000 venues – has undertaken new analysis that it states shows the extent to which such businesses are being financially disadvantaged by a lack of support by the Scottish Government, and which has been presented to Holyrood's economy committee. It also found that a medium-sized Scottish hotel will be £30,000 worse off than south of the Border, while larger businesses “have been denied support worth up to £110,000”, the payment cap.

Michael Bergson, owner of Buck’s Bar and Thundercat, told The Scotsman that for many pubs, a debt of £15,000 is “enough to force them out of business”. He also said the sector feels “exasperated” at they way it is being treated by the Scottish Government. “They’re far more focused on policies that present challenges than ones that help.”

UKHospitality Scotland also said that in December, Holyrood “chose not to introduce any form of business rates relief scheme for hospitality venues”, while England extended its 75 per cent business rates relief “and resulted in millions of pounds being allocated to the Scottish Government”. The Scottish arm of UKHospitality also cited the The Fraser of Allander Institute having calculated that at least 10,000 hospitality businesses are now operating without any financial assistance.

Leon Thompson, executive director of UKHospitality Scotland, said: “In the current climate, it is almost impossible to fathom a local pub landlord or hotel manager being able to find thousands of pounds to pay a bumper business rates bill in April. Many are struggling to keep the lights on as it is, in the face of extortionate rises in energy, food, drink, and wages.

“It is an active choice of the Scottish Government not to support these critical venues… Our pubs, restaurants, hotels and cafes, to name a few, are pillars of our communities. There is still time for the Scottish Government to put right their widely-criticised decision not to provide business rates support this year. As they finalise this year’s Budget, I would urge them to use the funds available to them and introduce a 75 per cent business rates relief scheme.”

The organisation along with the Scottish Licensed Trade Association and Scottish Tourism Alliance at Holyrood stressed the case for more support. The Scottish Parliament’s committee convener Claire Baker asked the sector why it still needs government support when visitor numbers are rising and its economic value is increasing. Thompson replied: "Whilst venues may be busy, the costs have just gone through the roof. Whilst turnover is high, there's little profit for businesses that are making any profit at all."

Leon Thompson, executive director of UKHospitality Scotland, says the new figures 'clearly illustrate the real-life consequences of the Scottish Government’s decisions'. Picture: Sara Porter.

Colin Wilkinson of the SLTA said hospitality has already faced the impact of the deposit return scheme, tourism tax, and alcohol advertising restrictions. "These kind of things don't help the industry – our sector is fighting for its survival." The SNP's Gordon MacDonald was quoted saying many of the concerns expressed were about policy areas under Westminster's responsibility.