At the helm in uncertain times

Brexit is ‘biggest challenge’ facing hospitality sector

Willie Macleod

By Gillian McKenzie

WILLIE Macleod is no stranger to navigating choppy waters.

A keen sailor, he has travelled much of Scotland’s coastline and visited most of its islands.

As executive director for Scotland at trade group UK Hospitality (the result of the merger between the British Hospitality Association – at which Macleod had held the executive director for Scotland role since 2011 – and the Association of Licensed Multiple Retailers earlier this year), he has seen the industry through some rough seas too, at the coal face when it comes to lobbying on behalf of hospitality businesses on a range of issues. And there has been no shortage of those in recent times.

But he reckons Brexit is perhaps the biggest challenge yet – quite literally uncharted waters.

Since the ‘leave’ verdict was returned in the June 2016 referendum, Macleod has been vocal about the impact Brexit could have on Scotland’s hospitality industry.

But with Brexit Day (March 29, 2019) now less than a year away, and a lack of clarity continuing to surround the free movement of people and immigration regimes, not to mention trade tariffs, Macleod said there remains “huge uncertainty” for the sector.

“Brexit is one of the major issues affecting our industry,” he said.

“I was at a Brexit reference group [recently] and I came away from that, I’m not sure I’d say with heightened concerns but with no fewer concerns.

“There is a lot of uncertainty surrounding immigration; we need migrant workers and we desperately need confirmation from the government that there’s going to be some overhaul of immigration policy to attract workers.

“The ones that want to come here are uncertain and the ones that are already here are uncertain.

“And it goes beyond staff. It covers the ease with which our EU customers can come here for business or leisure; we need to make the country accessible.

“We’re also worried about any import tariffs on food and drink and also on things like equipment and furniture.”

Of course Brexit is just one of many challenges facing businesses in Scotland’s hospitality sector in what remains a tough trading environment.

Business rates continue to weigh heavy on the minds of many operators.

The pressure on businesses to comply is the greatest I’ve seen in my career.

Macleod was instrumental in securing the cap on business rates rises, which was implemented in April 2017 and subsequently extended to the 2018/2019 financial year, following a protracted lobbying effort by the BHA together with the Scottish Licensed Trade Association (SLTA).

It has temporarily limited the astronomical increases facing many operators, but Macleod knows there’s still a way to go before the issue is resolved satisfactorily.

“The cap was a big win,” he said.

“The BHA and the SLTA started raising concerns about the 2017 revaluations early on. At that point the assessors and the Scottish Government didn’t want to know.

“But eventually they acknowledged that we were unfairly affected by the revaluation. That was recognised by the cap going on and then being extended.

“I think that was a success but it’s not the end of the story on rates. Rates remain an issue.

“We’re waiting to see the outcome of appeals; and we’ll continue to press for a review of the revaluation methodology and for an extension of the cap to 2019/2020.”

It’s not just business rates that are the focus of current lobbying efforts.

Scottish Government plans to implement a Deposit Return Scheme (DRS) for plastic and glass bottles; recommendations from Food Standards Scotland that all premises serving food should consider cutting portion sizes and publishing calorie information on menus; the threat of a tourist tax; the VAT rate for the hospitality sector; and “fairly regular change and tinkering with licensing law” are among the issues currently occupying Macleod’s inbox.

In fact, he reckons the volume of regulation – in force and on the horizon – facing pub, restaurant and hotel businesses is at the highest level he can remember.

“I think in recent years we’ve seen an awful lot coming our way and I think there’s a lot coming towards the industry,” said Macleod.

“One example is, we complied with waste regulations when they came in two or three years ago – businesses put in place arrangements to manage their waste. No sooner was that in than DRS comes along, which will mean existing arrangements being unpicked.

“I think we need to be careful we’re not putting too much pressure on businesses.

“There’s constant change and regulation; and there’s increasing demands on our businesses to comply. The pressure on businesses to comply is the greatest I’ve seen and I’ve been involved in this industry for a long time.”

Despite the challenges, Macleod reckons the hospitality industry – a sector in which he never intended to work (he planned to be a journalist) until a stint helping out at a family hotel in Argyll when he was 18 set him on a different career path – is in “good heart”.

“I think the industry is buoyant generally,” he said.

“It would be wrong to suggest every business is doing well, but we are seeing investment and expansion.

“And there are great opportunities for people working in this industry.

“I think there are reasons for optimism, providing we don’t see any further regulation. We could do with a period of stability.”