Governments need a real plan for hospitality sector recovery

Business rates relief and VAT cut among the actions required by sector

man sitting at a bar

FOCUSED support for hospitality from both Holyrood and Westminster governments will be essential if the industry is to recover and thrive in 2023.

That was the message from Scottish hospitality trade groups, who said the sector badly needs the Scottish and UK administrations to take action on issues including business rates and VAT, while limiting any new regulations which could hamper the industry’s recovery.

“Both Westminster and Scottish governments need to act now and adopt a focused business recovery plan, not least an immediate reduction in the rate of VAT and a substantial lowering of business rates for the licensed hospitality sector, which is already disproportionately overburdened,” said Scottish Licensed Trade Association managing director, Colin Wilkinson.

“This will protect businesses and jobs and stimulate the economic growth the country desperately needs.”

Wilkinson added that he had been “bitterly disappointed” by December’s Scottish Budget, in which deputy first minister John Swinney had failed to match the business rates relief being offered by the UK and Welsh governments.

“The extended and increased rates relief for retail, hospitality and leisure businesses in England is worth almost £2.1 billion, yet there is nothing for Scotland,” he said.

Leon Thompson of UK Hospitality Scotland said the lack of rates relief for Scottish businesses was “painfully at odds with the support provided by the UK Government and Welsh Government to their hospitality sectors”.

“By following their example, the Scottish Government would have extended a lifeline to struggling businesses so vital to our economy,” said Thompson.

He also took issue with the “burdensome and costly regulation” represented by the Scottish Government’s upcoming Deposit Return Scheme.

“Beyond the Budget, it is very concerning to learn that the Scottish Government’s own Gateway Review into the Deposit Return Scheme concluded that the scheme is not deliverable, in full, by the go live date of 16th August 2023,” said Thompson. “DRS alone is already costing hospitality businesses and producers time and money as they work to prepare for it.”

Scottish Hospitality Group spokesman, Stephen Montgomery, said the Deposit Return Scheme was one of several major issues facing the industry in 2023, along with recruitment, calorie labelling and a potential ban on alcohol advertising.

“It is clear that we certainly have many hurdles to overcome in the year ahead if we are aiming to be world leaders in hospitality and tourism in Scotland,” he said.

“I would urge the Scottish Government to engage at every level with the sector, from officials to the first minister, to listen, support and understand the hospitality model, which is currently broken, and allow those on the ground to input properly into policy and decision making.”

And Emma McClarkin of the Scottish Beer & Pub Association said business owners “desperately need additional action from both the Scottish Government and Westminster to save our much-loved pubs”.

“Staff shortages, pressures throughout the supply chain, rising business costs, and unfathomable energy prices with inadequate support, are all adding together to create an extremely hostile environment for businesses,” said McClarkin.