UK Budget: Chancellor told to protect 'beating heart' of Scotland's high streets as poll reveals closure fears
More than half of Scots are concerned pubs, cafes and restaurants could close following the Chancellor’s controversial decision to hike National Insurance contributions.
Chancellor Rachel Reeves has been warned she risks ripping out the “beating heart” of high streets across Scotland, as new polling reveals more than half of Scots believe their local pub could close following Labour’s National Insurance hike.
Ahead of Ms Reeves’ crunch Budget on Wednesday, branded “generation-defining” by Scotland’s leading trade unionist, her government has been warned that Scots are concerned hospitality businesses are at risk of closure over her controversial decision to hike National Insurance employer contributions.
The Chancellor has also been warned not to inflict “death by a thousand taxes” on businesses after the head of the Confederation of British Industry (CBI), Rain Newton-Smith, said the UK government must “change course” and avoid heaping more costs on firms. The CBI fears this will happen to fill a black hole in the public finances after a downgrade in the Office for Budget Responsibility’s economic growth forecast for every year of this Parliament.
Polling commissioned by the Liberal Democrats and conducted by Savanta found more than half (54 per cent) of Scots are concerned about their local pub closing, while 44 per cent think bars and nightclubs could be lost.
The study revealed 60 per cent of Scots were concerned that cafes and restaurants may close, while 47 per cent indicated worry they would lose their local hairdresser.
Savanta interviewed 2,019 UK adults between October 31 and November 3.
The Lib Dems have called on Ms Reeves to agree to an emergency 5 per cent VAT cut for hospitality businesses until April 2027, a measure that could cost the Treasury an estimated £7.5 billion.
Scottish Lib Dem MP Susan Murray said: “Across Scotland, hospitality is the beating heart of our high streets, but pubs, restaurants, cafes and more are at serious risk of being taken away from us - no wonder residents are so concerned.
“Not only are mid-morning coffees, after-work pints and weekend cocktails quickly becoming an unaffordable luxury for many across our area, but soon they may not even be an option.”
She added: “With the Chancellor’s damaging jobs tax and people having less money to spend, independent hospitality businesses in our towns just cannot sustain themselves. It is absolutely devastating.
“The Chancellor cannot deliver another doom and gloom Budget that risks further decline.”
Kate Nicholls, chairwoman of UKHospitality, said: “This Budget is make or break for hospitality.
“We’ve had 13 consecutive months of falling employment and 170,000 fewer people on payroll across the UK since last year’s Budget – a shocking indictment of the damage caused by those measures. Hospitality has borne the brunt, with the sector accounting for more than half of all job losses across the economy and with two sites closing a day. Businesses in the sector are reducing hours, cancelling investment, raising prices and, in many cases, closing their doors altogether.
“If the government wants to get people back into work and revitalise high streets, it needs hospitality firing on all cylinders. But right now, we’re being taxed out.
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“We urgently need action and are calling on the government to fix NICs to boost jobs and begin to reverse the damage caused last year by the changes to employer NICs, which disproportionately hit hospitality.”
Asked about the concerns over hospitality businesses, a Treasury spokesperson said: “The Chancellor will deliver a Budget that takes the fair choices to build strong foundations and secure Britain's future.”
The poll results were published as SNP Housing Secretary Mairi McAllan called on Ms Reeves to reverse a planned cut to capital funding and financial transactions - with a plea for the UK government to help “reinvigorate” housebuilding in Scotland.
SNP ministers have pledged almost £5 billion for an affordable housebuilding programme that could deliver up to 36,000 new homes across the country. But Ms McAllan has warned this blueprint risks being “hampered” by Budget decisions from the UK government.
The UK spending review in June showed the Scottish Government faces a 1.1 per cent real-term cut in capital funding from Westminster between 2025-26 and 2029-30. The Scottish Government’s financial transactions, a key source of funding for the affordable housing supply, has been increased by Ms Reeves’s government after being depleted under the Conservatives, but Scotland is only set to receive 3.4 per cent of the overall UK allocation.
READ MORE: SNP minister blasted UK Government communication despite cancelling meeting with Labour minister
Ms McAllan said: “We have created strong foundations in Scotland to ramp up housebuilding through our housing emergency action plan, which has committed up to £4.9bn to a major delivery programme, which will deliver up to 36,000 homes.
“However, these plans could be hampered by the UK government’s planned cuts to our capital funding and in a shortfall in financial transactions, which are a vital tool in delivering homes across Scotland.
“Whilst in London I will be demonstrating my ambition to bring more investment to Scotland and increase housing supply. I urge the Chancellor to show the same ambition and reinvigorate housebuilding across the UK, with significant benefits to the sector in Scotland.”
STUC general secretary Roz Foyer has warned this UK Budget will be “generation-defining”.
She said: “It will signal to all whether the UK government will continue to adhere to self-imposed financial rules and chaotic quick fixes, or whether they will invest in the public services and the industries and jobs of the future, delivering for workers with bold, radical policies to redistribute wealth.”
The Chancellor’s Budget is expected to focus on measures to cut NHS waiting times, cut debt and reduce the cost of living.
Additional NHS funding for England is likely to spark more money for Holyrood ministers through Barnett consequentials. But the construction of new neighbourhood health centres south of the Border is poised to be brought forward by a new public-private funding model.
Speaking ahead of the Budget, Ms Reeves said: “We’re driving down waiting lists by bringing healthcare to patients' doorsteps and turbocharging NHS productivity with cutting-edge technology.
“Our record investment, combined with ruthless efficiency and reform, will deliver the better care and better outcomes our NHS patients deserve.”
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