Minor restriction tweaks would secure future of 1800 Scottish hospitality businesses and 32,500 jobs says economic impact study

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Scottish hospitality business turnover would leap from £419m to £1.1bn – swelling the number of jobs supported from the current 28,300 to 60,800 and securing the viability of 1,816 businesses simply by adjusting business opening hours by around two and a half hours and allowing alcohol to be served under strictly controlled conditions, says a new independent economic impact study by BiGGAR Economics commissioned by Diageo.

The changes to restrictions would also transform the impact on public finances, turning a £261m fiscal cost of subsidy into a £63m positive tax contribution, but a return to the stricter restrictions as seen up to 10th December would cost thousands of jobs and come at a fiscal cost of £347 million.

The economic impact study examined several policy scenarios – all of which maintain key restrictions to ensure public safety and to prevent the spread of COVID-19 – but allow longer opening hours and alcohol to be served across Levels 1 to 3 of the Scottish Government’s regional restrictions.

Trade bodies like The Scottish Hospitality Group (SHG), the Scottish Beer & Pub Association (SBPA), Scottish Licensed Trade Association (SLTA) and UKHospitality-Scotland (UKH-Scotland) are all calling for the Scottish Government to urgently implement the changes to save businesses and jobs.

Director of UKHospitality-Scotland, Wille MacLeod said, “The restrictions, as currently in place, have a disproportionate impact on the hospitality sector and is costing the Scottish economy millions of pounds. A relaxation, as has been suggested by the industry would give our sector a transformative boost and help support business in the crucial recover period.”

CEO of the Scottish Beer & Pub Association, Emma McClarkin said, “Public health remains the paramount concern and hospitality businesses have proven they can operate safely with comprehensive COVID-19 measures in place. This economic impact study shows that relatively minor changes to opening hours and allowing businesses to serve alcohol responsibly, would transform the commercial viability of the sector.

Managing Director of the Scottish Licensed Trade Association, Colin Wilkinson, added, “This would create a more sustainable environment for hospitality businesses beyond Christmas and ensure more of them survive the winter, continue to create jobs and play the positive role as part of the fabric of communities the length and breadth of Scotland.”

The study revealed the enormous economic cost the current restrictions policy is having on the hospitality sector, reducing annualised turnover from £2bn pre-Covid to just £276m under the restrictions that were in place in November, with the number of jobs supported collapsing from 83,400 to 19,100.

Graeme Blackett of BiGGAR Economics, said, “This study highlights the severe negative economic impact that COVID-19 restrictions have had on the hospitality sector, the businesses and people who work in the sector itself, and the businesses and employees in the supply chain.

“It also demonstrates that scenarios which allow for extended trading, whilst maintaining appropriate safety restrictions, can place the hospitality sector and the wider food and drink supply chain in a much stronger position.

“Minor adjustments to the restrictions could get thousands of people back to work and allow the sector to generate turnover, and contribute significantly to the public finances in 2021.”

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