Scottish Government urged to take 'monumental step forward' of slashing business rates for pubs and bars

The Scottish Government is being called on to investigate a “new deal” for the nation’s pubs and bars on business rates to help “desperately” relieve pressure on such firms that are branded a major growth driver of the Scottish economy.

The Scottish Beer & Pub Association says such firms face 'strong' headwinds, 'preventing many from being able to recover fully from the impacts of the pandemic' (file image). Picture: Peter Summers/Getty Images.

The Scottish Beer & Pub Association (SBPA), which represents brewers and pub companies north of the Border, is proposing a new hospitality-specific business rates multiplier (poundage) set at 35p in the pound – marking a drop from the current range of 49.8p to 52.4p depending on the property. The organisation said this proposal, which it has outlined alongside others in its Programme for Government 2024 document, would support the industry in continuing to rebuild from the pandemic while dealing with rising costs and staffing pressures.

The trade body says Scotland’s beer and pub industry tops up the economy by £1.6 billion annually, while it employs 88,700 people. SBPA boss Emma McClarkin also stressed the sector’s major contribution to the economy, and said it is a "critical” element of Scotland’s tourism offer, but with firms in need of more backing to safeguard their future. She added: “The Programme for Government gives the Scottish Government an opportunity to show clear support for the sector by committing to investigating a new deal on business rates.

“Scotland’s pubs and bars continue to face a multitude of strong headwinds, which is preventing many being able to recover fully from the impacts of the pandemic. We’ve already seen more pubs close in the first half of this year than closed in the whole of 2022.”

The trade body in fact says the number of Scotland pubs closing in 2022 was 56, already exceeded at 61 in the first half of 2023 to fall to 4,408.

McClarkin added: “We desperately need to relieve pressure on these businesses, and additional support on business rates continues to be the number one ask from pub-operators in survey after survey. A new deal on business rates with a new hospitality poundage rate, set at 35p in the pound, would be a monumental step forward for Scotland’s pubs and bars.”

The call follows others urging an overhaul of business rates in Scotland, with the Scottish Retail Consortium in June raising concerns about a projected rise that it says would hit firms with an additional tens of millions of pounds in costs. That comes after the Scottish Licensed Trade Association warned earlier this year that the majority of bars and pubs across Scotland were reducing opening hours amid “enormous” increases in business rates, energy costs, and continued staff shortages.

Other recommendations now from the SBPA, part of the wider British Beer & Pub Association, include support for reduced VAT, official endorsement of low and no alcohol products as ways to encourage responsible consumption, and recognition for the cumulative regulatory burden currently facing the sector.

McClarkin added: “In addition to an improved situation on rates, the Scottish Government can make a positive contribution by adding their voice to calls for a reduction in VAT and acknowledging the regulatory burden on our much-loved community pubs and bars needs to be reduced."