Whatever the Budget brings, Scottish business rates need reformed

Paul Wishart and Alyn Smith

As the hospitality industry held its breath in anticipation of ScotGov’s Budget announcement – which may or may not include measures to ease the financial pressure on the sector – the operations manager of Scotland’s biggest pub chain and an SNP MP met in Stirling to discuss the trade’s concerns.

Greene King’s Paul Wishart, with around 120 leased/tenanted pubs in his remit, and veteran SNP politician Alyn Smith, share some common ground – Stirling. Historically a stronghold of the pub chain in Scotland, the centrally placed town is Paul’s home; and as the sitting MP for the district, Alyn has made it his too.

Meeting in Greene King’s newly refurbished operation at The City Walls, both men strongly agreed that pubs were the heart of communities such as theirs, and deserving of protection above and beyond concern for simple profit and loss.

So why, asked Paul, was the trade not getting more encouragement and support from ScotGov? And in particular, why hadn’t it matched the 75% rates relief that had been introduced for hospitality businesses south of the border.

“Looking at our 120 or leased businesses, the fact right now is that if we could lift them up and put them back down in England, they’d instantly be, on average, £13,000 better off,” said Wishart.

Paul Wishart

“That kind of money could mean an extra member of staff. It could mean investment. That is why we have reached out to Alyn – for those leased businesses, who are already having to endure reduced footfall and higher costs. We feel it is the right thing to do, that what’s been given to England is made available in Scotland.”

Smith, who represents the Stirling constituency at Westminster, has already gone on the record with a call for ScotGov to introduce 75% rates relief for hospitality: “It’s unusual for a party member to have to call on their own government to do something,” he conceded.

“But it is going to be a long winter. I have pals in hospitality, and they let me know how tough it is. And there are villages across Stirling where we know, once the pub was lost, all that was left was a dormitory. Communities needs a pub, and that is said with all the caveats about alcohol consumption. Local pubs play a bigger role than just selling alcohol.

“Equally, people aren’t coming to Scotland for the weather, but they come for the doing and seeing and tasting. The nightlife also makes our cities. Without it, the city just falls away.”

As the Budget looms, Mr Smith held out some hope in the form of a letter newly received from ScotGov Minister for Community Wealth and Public Finance, Tom Arthur MSP, written in reply to Smith’s query about non-domestic rates and the hospitality sector.

“The hospitality sector is vital to Scotland’s economy,” stated Arthur. “Ministers are acutely aware of the enormous pressures facing businesses across the country, including inflation, energy price rises, and higher costs of borrowing – which is why we are taking decisive steps to offer support during this crisis, with limited powers and working within the most challenging budget since devolution.

“The Scottish Government is now assessing the full implications of the Chancellor’s Autumn Statement and how it can both support businesses and the public sector in what are extremely challenging financial times.

“The Scottish Budget 2023-24 ensures the lowest poundage in the UK for the fifth year in a row and supports a package of reliefs worth an estimated £749 million, including the Small Business Bonus Scheme (SBBS) which is estimated to take over 100,000 properties out of rates altogether. We estimate that around half of the properties in the retail, hospitality and leisure sectors are eligible for 100% SBBS relief this financial year.”

Mr Wishart welcomed the Minister’s recognition of hospitality’s value to the Scottish economy, but noted that not one of Greene King’s Scottish pubs had met the threshold for SBBS, and added that other recent ScotGov activities had shown a much less helpful attitude to the nation’s pubs and clubs. While both alcohol marketing restrictions and the Deposit Return Scheme had since been kicked into the long grass, the industry was, he said, suffering from a cumulative feeling that it had few friends at Holyrood.

Mr Smith was keen to dispel that impression. The alcohol marketing consultation had, he said, ‘asked questions’ of the industry and received an emphatic reply rejecting the possibilities it had raised, which was how such consultations were meant to function. It was only unfortunate, he added, that it had happened alongside, and thus been conflated with, the ‘binfire’ of the DRS.

“We simply cannot be falling out with a key Scottish industry,” said Smith. “Going forward, if I can personally do anything to boost the political message from hospitality, let me know.”

Whatever comes out of this imminent budget, Mr Smith and Mr Wishart agreed that there was a pressing need for fundamental business rates reform, as temporary reliefs and special schemes could only ever be insecure sticking plasters applied to a much bigger systemic problem.

To that end, a meeting is now being set up with Mr Arthur to discuss business rates reform.