All 83 nightclubs in Scotland will have closed by 2030 at current rate. Here's how to save them

We are now at the sharp end of the Scottish Conservative leadership contest, with ballot papers arriving with members this week. These require to be returned by September 26, with an announcement of the result the following day.

There are aspects of the campaign over the last few weeks which I have enjoyed enormously. There have been seven in-person hustings across all parts of Scotland, and a further three which have taken place online. It has been an excellent opportunity to meet many of our members, set out my case and answer their questions.

Sadly, not all of the campaign has been so positive. There have been blue-on-blue attacks against my fellow candidate Meghan Gallacher and myself, and accusations of sexism and misogynistic bullying. We even had the extraordinary sight of the Shadow Secretary of State for Scotland threatening legal proceedings against Meghan after she raised a complaint about his behaviour. In any workplace, such alleged conduct would be deemed unacceptable, and it seems a significant error of judgment to engage lawyers to try and silence a complainant.

It goes without saying that our members and supporters are dismayed by what they have seen. My colleague and our former leader Jackson Carlaw MSP was entirely right to say on Monday that this conduct had to end or it would be very hard for whoever wins this contest to pull the party back together again in time for the vital Holyrood elections in 2026. We should all be listening to his wise words.

Hospitality sector crisis

For my part, I am keen to concentrate on a positive policy agenda, addressing the challenges facing Scotland today. And none could be more serious than the crisis facing our hospitality sector.

This month the long-running Glasgow nightclub The Shed will close after operating for 26 years, with its owners citing rising costs and business challenges as the reason for the decision. It is just the latest announcement from an industry across bars, restaurants and nightclubs which has been struggling in recent years.

Nightclubs will disappear from not just Scotland, but the whole of the UK, by 2030 if the current rate of closures continues (Picture: Claire Greenway) | Getty Images

According to a study by the Night-Time Industries Association (NTIA) from May this year, the UK has lost five nightclubs every week in the first part of 2024, and at the current rate of decline the country may have no nightclubs left by 2030. In Scotland, there are currently 83 nightclubs, down from 124 in 2020.

Plea for rates relief ignored

It is the same across restaurants and bars. At the end of last year, the Scottish Beer and Pub Association and the Scottish Licensed Trade Association joined forces to highlight the number of pub closures in Scotland, accelerating at double the rate here compared to England. At that point, they called on the Scottish Government to pass on the 75 per cent rates relief available for retail, hospitality, and leisure businesses in England to the same sectors here – a call which SNP ministers refused to heed.

Hospitality is the lifeblood of our tourist sector, an industry which is disproportionately important to Scotland compared to other parts of the UK. Without thriving hotel, restaurant, and bar businesses, there will be nowhere for visitors to eat and drink, and we will lose the employment and economic opportunities that the sector provides.

It is not just the burden of business rates that has harmed these industries. Rising wage and energy costs are a substantial factor, as is the increasing burden of regulation emanating from Holyrood – the introduction of low-emission zones (LEZs) in city centres, the failed deposit return scheme, and the prospect of new restrictions on smoking in outdoor spaces. We also see the additional costs that the transient visitor levy, or ‘tourist tax’ will bring, making Scottish destinations even less competitive to international visitors.

VAT cut a real shot in the arm

For years the hospitality sector has lobbied for a lower rate of VAT. The UK currently has the highest VAT rate on hospitality in Europe, at 20 per cent, unlike many other countries where a lower rate is applied. Post-Brexit, there is nothing to prevent the UK Government introducing a lower VAT rate for hospitality, and it is a move which would give a crisis-hit sector a substantial shot in the arm at a time when it is most needed.

Given the rate of nightclub closures we are seeing, it is exactly the sort of significant intervention that is required. And, given the relative greater significance of the hospitality sector to the wider economy in Scotland compared to the rest of the UK, it is an issue that affects us here more.

I have been persuaded that a cut in VAT for hospitality, perhaps to ten per cent, would be the one single intervention that might make a real difference to the survival of many of the businesses currently threatened with closure. That is not to excuse the Scottish Government of their failure to pass on the rates relief applicable down south, but it is a move that could be done now that might just ensure a vibrant industry for years to come.

Standing up for Scotland

It has long been my view that the Scottish Conservatives should be prepared to support interventions, even in relation to reserved policy, where there is a specific Scottish interest at stake. Just as we should be arguing for the scrapping of the energy profits levy because of its negative impact on the Scottish economy, as I stated in this column last week, so we should now be championing a cut in VAT for hospitality.

If I am successful in my bid to be Scottish Conservative leader, this is the sort of policy approach I want to see my party adopt. And I will be asking the contenders for the UK Conservative leadership to support my call.

With the current rate of hospitality closures, the tax take from the industry is in freefall. By giving the industry a boost, any tax cut at this stage could well pay for itself. It is exactly the sort of pro-business policy that Scottish Conservatives should be championing.

Murdo Fraser is a Scottish Conservative MSP for Mid-Scotland and Fife