SNP MP warns: Cut business rates or risk ‘economic calamity’

Stirling MP Alyn Smith urges Scottish Government to ‘do all they can’ for hospitality

Alyn Smith (left) has backed calls for a business rates cut.

AN SNP MP has thrown his support behind the hospitality industry by calling for a cut in business rates.

Stirling MP Alyn Smith has called on finance secretary Shona Robison to introduce 75% rates relief for hospitality businesses in order to ‘head off a regional economic calamity’.

Hospitality businesses south of the border have enjoyed 75% relief on their business rates bills for the past year, with the measure extended for a further year in the recent Autumn Statement.

In a letter to the finance secretary, Smith said he believes that replicating that support in Scotland ‘is urgently required to avoid further closures in the sector, to support workers, and help maintain the vitality of our high streets in cities, towns and villages’.

Smith said: “Retail, hospitality and leisure businesses are the lifeblood of Stirling’s city centre and high streets. Many are having a really tough time at the moment, with cost pressures continuing to rise, energy bills remaining at historic highs, and the fallout from a slowing economic picture. They need all the support they can get, and I urge the Scottish Government to do all they can in their own budget considerations to support these businesses to the fullest.

“Stirling is a fantastic place to live, work, study or visit, and I’ve met with countless businesses across the entire constituency who do so much for their community. If we’re to head off a regional economic calamity, and stave off even more empty retail premises, we need to see real action to help our businesses.”

The calls come after similar pleas from hospitality trade groups.

Scottish Licensed Trade Association managing director, Colin Wilkinson, said the extension of the 75% rates relief in England ‘sends a vital message to the Scottish Government that this should be replicated in Scotland’.

“Implementing this measure in (the) Scottish Budget would send a clear message from the Scottish Government that it understands our sector contributes to building a strong economy but there is no doubt that businesses in cities, towns and villages across Scotland need support if they are to be part of efforts to rejuvenate communities, boost economic growth and create jobs,” said Wilkinson.

Scottish Tourism Alliance chief executive, Marc Crothall, said Scotland’s businesses ‘require the Scottish Government to urgently signal that it will mirror this support in December’s Scottish Budget announcement’.

“This will be key to supporting the tourism, leisure, hospitality and retail sectors over the next financial year,” said Crothall.

“Not doing so, as has been the case this past year, will without question see the demise of many businesses within our sector.”

And Paul Togneri of the Scottish Beer & Pub Association said Scottish operators ‘have been at a competitive disadvantage’ over the past year due to the rates disparity.

“The Barnett consequentials triggered by the 75% business rates discount in England must be used to end the disparity in Scotland, and to ensure that our much-loved pubs and bars are able to continue to be a powerhouse of the Scottish economy,” he said. “Anything less will be met with dismay by pub operators, who collectively employ over 45,000 people in the country.”

The Scottish Budget will be delivered on 19th December.

Alyn Smith’s letter to finance secretary Shona Robison in full:


Dear Shona,

Scottish Budget 2024/25 – Need to Support Hospitality Businesses

I write ahead of the draft Scottish budget on 19 December to press the need to support Scotland’s hospitality sector through additional Non-Domestic Rates relief. I keenly appreciate the budget process is never an easy one, but especially now given the economic shambles the UK government has created for us. However, hospitality businesses are crucial to Stirling and particularly the vitality of our rural villages in so many ways I believe they deserve enhanced support.

The UK Chancellor’s Autumn Statement undoubtedly creates difficulties for devolved governments and puts pressure on already strained budgets. Without full borrowing powers, the task of ensuring budgets are balanced and that public services are supported to the degree required becomes increasingly difficult.

Hospitality businesses, in my constituency and across the country are similarly feeling the impacts of Westminster’s cost of living crisis. Statistics shared with me from the Scottish Beer & Pub Association showed a 43% increase (on 2019 figures) in combined cost pressures ahead of the Autumn Statement which have only been exacerbated since. The failure of the UK Government to reduce VAT rates – something not within the gift of devolved governments – will also have major negative impacts for the sector. I am sure you share my disappointment that this clean, quick and straightforward way to boost the bottom line of hospitality turnover was not taken by the UK government.

For the hospitality sector in England however, the 75% relief for NDR (up to £110,000 per business) gives these businesses much needed support to offset the increase in costs. It is my view that replicating in Scotland this level of support is urgently required to avoid further closures in the sector, to support workers, and help maintain the vitality of our high streets in cities, towns and villages.

Support from the Scottish Government previously exceeded that offered by the UK Government during the pandemic. The energy crisis (which has seen bills for pubs and bars increase on average 120% from 2019), increased labour, food and drinks costs, a reduction in consumer spending power, and increased tax pressures means that the sector requires more support now. It is going to be a long Winter and I fear many businesses will not make it.

I do hope that the Scottish Government implements, at least, a 75% rates relief for our much-loved pubs and bars, which employ over 1350 in my constituency and 61,900 across Scotland. Longer term, I am very drawn to the idea of a permanent 35p NDR multiplier for licensed hospitality, to give the sector certainty in the years ahead and provide added incentive to invest in these businesses in Scotland.

Yours aye,

Alyn Smith MP