Campaigners are warning that Scotland stands to lose one in ten of its pubs within five years unless the Chancellor reduces beer duty in the autumn Budget next Monday.
Research for the Scottish Beer and Pub Association (SBPA) suggests if closures continue at the current rate, 561 Scottish pubs will close their doors in the next five years – equivalent to 12 per cent of Scotland’s total number of pubs.
The data was provided by Britain’s Beer Alliance, the organisation representing regional, independent and international breweries, for the SBPA.
A recent study has predicted that if duty on beer continues to increase in line with the Retail Price Index measure of inflation there could be 12,500 job losses across the UK over the next four years. The sector contributes around £1.7 billion to the Scottish economy and pays just under £1bn in taxes.
The SBPA also warned that the imposition of a “tourist tax” in Edinburgh would hammer the pub sector.
The concerns were raised as the SBPA responded to Edinburgh City Council’s consultation on proposals to charge either 2 per cent or £2 per room, per night, to all guests in all forms of accommodation. The tax – or “transient visitor levy” (TVL) – would be charged all year round but it would be capped at seven nights.
Brigid Simmonds, chief executive of the Scottish Beer & Pub Association, said: “A consultation by the City of Edinburgh Council for a ‘tourist tax’ is of real concern to the beer and pub sector.
“In Scotland, our industry supports nearly 60,000 jobs and contributes £1.73bn to the economy – it is also a crucial part of the nation’s tourism offer, with a visit to a traditional pub third on the list of things tourists do when they visit.
“Pubs have faced a number of challenges over the last decade and still face increasing and considerable tax pressures from a range of sources; particularly high beer duty, unfair business rates and VAT.
“Any introduction of a ‘tourism tax’ in Edinburgh will see tourists having less money to spend in the city and only add to the challenges. Any introduction must therefore be accompanied by a reduction in tax elsewhere.
“The UK ranks almost bottom on any list on price competitiveness for tourists and unlike most countries in the EU does not offer reduced VAT on either accommodation or food. We also have some of the highest rates of air passenger duty in the world. It is vital that any levy is hypothecated back into the sector to attract more visitors to the city and help those businesses which will be impacted by this tax.”
She added: “On average, every pub contributes £100,000 to their local economy each year, and with tourism being such an important backbone to Edinburgh’s economy, a ‘tourism tax’ on one of Edinburgh’s most successful businesses could be bad news.”
On the prospect of pub closures due to beer duty rates, Ms Simmonds urged people to support the Long Live the Local campaign.